Surat Trade & Merchantile Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results in Q3 2023

Surat Trade & Merchantile, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on May 21, 2024. This upgrade comes as the company has shown positive results in the third quarter of 2023, with higher net sales of Rs 45.47 crore and the highest PBDIT of Rs -0.57 crore. The operating profit to net sales ratio has also improved to -3.74%.
One of the reasons for the 'Hold' rating is the company's low debt to equity ratio, which is currently at 0 times. This indicates a strong financial position and stability for the company. Additionally, the stock is currently in a mildly bullish range and the technical trend has improved from sideways to bullish on May 17, 2024. The MACD and KST technical factors also support a bullish outlook for the stock.

However, there are some concerns regarding the company's long-term growth. Over the last 5 years, the net sales have grown at an annual rate of -23.46% and the operating profit has seen a decline of -188.22%. This may be a cause for concern for investors looking for long-term growth potential.

Furthermore, the stock is considered risky due to its negative EBITDA and is currently trading at a higher valuation compared to its historical average. In the past year, while the stock has generated a return of 21.49%, its profits have fallen by -88.2%. This indicates a potential risk for investors.

In the last 1 year, Surat Trade & Merchantile has underperformed the market, with a return of 21.49% compared to the BSE 500 index's return of 36.54%. This may be a factor to consider for investors before making any investment decisions.

It is worth noting that the majority shareholders of the company are promoters, which may provide some level of stability and confidence for investors. However, it is important to carefully evaluate all factors before making any investment decisions.