Udaipur Cement Works: A Smallcap Company with Strong Growth and Attractive Valuation

Udaipur Cement Works, a smallcap company in the cement industry, has recently caught the attention of investors with its positive performance in the market. On June 14, 2024, MarketsMOJO upgraded its stock call on Udaipur Cement Works to 'Buy', citing multiple factors that make it an attractive investment.
One of the main reasons for the upgrade is the company's healthy long-term growth. Its operating profit has grown at an annual rate of 65.80%, indicating a strong and consistent performance. In addition, the company has shown positive results in the March 2024 quarter, with its debt-equity ratio at a low of 1.48 times and debtors turnover ratio at a high of 279.71 times. Its net sales for the quarter were also at a high of Rs 348.35 crore.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement since June 13, 2024. It has generated a return of -1.06% since then, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

Moreover, Udaipur Cement Works has an attractive valuation with a ROCE of 6.4 and an enterprise value to capital employed ratio of 1.7. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 45.95%, while its profits have increased by 53.2%.

However, there are some risks associated with investing in Udaipur Cement Works. The company has a high debt to equity ratio (average) of 2.33 times, which may be a cause for concern. Additionally, despite being a smallcap company, domestic mutual funds hold only 0.14% of the company, indicating a lack of confidence in the stock. This could be due to either the price being too high or concerns about the company's business.

In conclusion, Udaipur Cement Works is a promising smallcap company in the cement industry with a strong track record of growth and positive performance. While there are some risks involved, the company's attractive valuation and bullish trend make it a 'Buy' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.