Swaraj Engines downgraded to 'Hold' by MarketsMOJO, long-term growth a concern

Swaraj Engines, a smallcap company in the diesel engines industry, has recently been downgraded to a 'Hold' by MarketsMOJO on November 19, 2024. This decision was based on the company's high management efficiency, with a ROE of 34.52%, and a low Debt to Equity ratio of 0 times.
In September 2024, Swaraj Engines reported positive results, with its operating cash flow at its highest at Rs 142.38 crore and its dividend per share at Rs 95.00. The company also saw its net sales reach a high of Rs 464.24 crore.

Technically, the stock is currently in a Mildly Bullish range, with its MACD and KST technical factors also showing a Bullish trend. With a ROE of 43.3, the stock is fairly valued with a price to book value of 10.4. It is also trading at a fair value compared to its average historical valuations.

While the stock has generated a return of 37.46% in the past year, its profits have only risen by 8.1%, resulting in a PEG ratio of 3. Majority shareholders of Swaraj Engines are the promoters, indicating their confidence in the company's performance.

In the long term, Swaraj Engines has shown market-beating performance, outperforming BSE 500 in the last 3 years, 1 year, and 3 months. However, its net sales and operating profit have only grown at an annual rate of 13.08% and 9.89%, respectively, over the last 5 years, indicating poor long-term growth.

Overall, while Swaraj Engines has shown strong management efficiency and positive results in the recent quarter, its long-term growth may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.