Texmaco Rail & Engineering Receives 'Hold' Rating After Positive Quarterly Results

Texmaco Rail & Engineering, a midcap company in the railway industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared very positive results for the quarter ending June 2024, with a growth in net profit of 242.62%. This marks the seventh consecutive quarter of positive results for the company.
The company's PAT (9M) has grown at an impressive rate of 155.53%, while PBT LESS OI(Q) has seen a growth of 251.22%. Additionally, the company's ROCE (HY) is at its highest at 9.32%. These factors contribute to the stock's technical trend being in a mildly bullish range, with the MACD and KST technical factors also showing a bullish trend.

Texmaco Rail & Engineering has consistently generated strong returns over the last three years, outperforming BSE 500 in each of the last three annual periods. However, the company's long-term fundamental strength is weak, with a -5.93% CAGR growth in operating profits over the last five years. The company also has a high debt to EBITDA ratio of 4.31 times, indicating a low ability to service debt. The return on equity (avg) is at 3.91%, signifying low profitability per unit of shareholders' funds.

The stock is currently trading at a discount compared to its average historical valuations, with a price to book value of 3.3. However, with an ROE of 4.5, the stock is considered to have an expensive valuation. The PEG ratio of the company is 0.7, indicating that the stock's profits have risen at a faster rate than its price.

Institutional investors have decreased their stake in the company by -1.32% over the previous quarter, holding a collective 18.04% of the company. This decrease in participation by institutional investors may be a cause for concern for retail investors, as these investors have better resources and capabilities to analyze the fundamentals of companies. Overall, while Texmaco Rail & Engineering has shown strong performance in recent quarters, its long-term fundamentals and valuation may be a cause for caution for investors.