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 on September 18, 2024. 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 PBT LESS OI(Q) has grown at an impressive rate of 251.22%, while its PAT(Q) has seen a growth of 185.0%. Additionally, the company's ROCE(HY) is at its highest at 9.32%. These factors, along with technical indicators such as MACD, KST, and OBV, suggest a bullish trend for the stock.

Texmaco Rail & Engineering has also shown consistent returns over the last three years, outperforming the BSE 500 index 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 company's return on equity (avg) is at 3.91%, signifying low profitability per unit of shareholders' funds. With a ROE of 4.5, the stock is currently trading at an expensive valuation with a price to book value of 3.4. However, it is still trading at a discount compared to its average historical valuations. The PEG ratio of the company is 0.7, indicating that the stock may be undervalued.

Institutional investors have decreased their stake in Texmaco Rail & Engineering by -1.32% over the previous quarter, collectively holding 18.04% of the company. This suggests a lack of interest from these investors, who typically have better resources to analyze a company's fundamentals.

Overall, while Texmaco Rail & Engineering has shown strong financial performance in recent quarters, its long-term fundamentals and high debt levels may be a cause for concern. Investors may want to hold onto their positions for now and closely monitor the company's future performance.