Suryalakshmi Cotton Mills Receives 'Hold' Rating, Shows Positive Trend and Attractive Valuation

Suryalakshmi Cotton Mills, a microcap textile company, has recently received a 'Hold' rating from MarketsMOJO. The stock has shown a bullish trend and has improved from mildly bullish to a more positive outlook on December 26, 2023. This is due to multiple factors such as MACD, Bollinger Band, and OBV.
The company has an attractive valuation with a ROCE of 10.1 and a low enterprise value to capital employed ratio of 0.7. It is currently trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 32.24%, while its profits have increased by 320.7%. This has resulted in a low PEG ratio of 0.1, indicating a potential undervaluation.

Suryalakshmi Cotton Mills has also shown market-beating performance in the long term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months. However, the company's long-term fundamental strength is weak, with an average ROCE of 5.79%. Its net sales have grown at a negative rate of -0.17% and operating profit at 4.20% over the last 5 years.

The company's ability to service debt is also a concern, with a high debt to EBITDA ratio of 6.13 times. In the latest quarter, the company's results were flat, with a decline in both PAT and net sales. Additionally, 50.65% of the promoter shares are pledged, which could put downward pressure on the stock prices in a falling market.

Overall, while Suryalakshmi Cotton Mills has shown a positive trend in the short term, its long-term fundamentals and high promoter pledged shares should be considered before making any investment decisions. MarketsMOJO's 'Hold' rating reflects a neutral stance on the stock, based on its current performance and valuation.