Tribhovandas Bhimji Zaveri Downgraded to 'Hold' by MarketsMOJO, Despite Positive Financial Results and Bullish Technical Indicators

Tribhovandas Bhimji Zaveri, a smallcap company in the diamond and gold jewellery industry, has recently been downgraded to a 'Hold' by MarketsMOJO on November 4, 2024. This decision was based on the company's recent financial results, which showed positive growth in PAT (HY) at Rs 29.66 crore, with a 28.40% increase. The company also saw its highest operating profit to net sales (Q) at 6.94%, and a growth of 58.30% in PBT less OI (Q) at Rs 22.40 crore.
Technically, the stock is currently in a mildly bullish range, with both its MACD and KST technical factors showing a bullish trend. Additionally, with a ROCE of 9.9, the company has a very attractive valuation with a 2 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations, and has generated a return of 105.89% in the past year, with a PEG ratio of 1.3.

However, there are some concerns regarding the company's ability to service its debt, as it has a high Debt to EBITDA ratio of 4.86 times. This, coupled with poor long-term growth in net sales (5.45%) and operating profit (11.79%) over the last 5 years, may have contributed to the downgrade.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company, which could indicate that they are not comfortable with the current price or the business. As a smallcap company, Tribhovandas Bhimji Zaveri may have potential for growth, but it is important for investors to carefully consider all factors before making any investment decisions.