Ultracab (India) Upgraded to 'Buy' by MarketsMOJO After Impressive Financial Performance

Ultracab (India) has recently caught the attention of investors with its impressive financial performance. The company, which operates in the cable industry and is classified as a microcap, has been upgraded to a 'Buy' by MarketsMOJO on October 10, 2024.
One of the main reasons for this upgrade is the company's strong growth in net profit, which saw a staggering increase of 106.8% in the last quarter of June 2024. This positive trend has continued for the past two consecutive quarters, with PBT LESS OI(Q) growing at 107.91% and PAT(Q) reaching its highest at Rs 2.13 crore. Additionally, the company's net sales also reached its highest at Rs 53.69 crore.

From a technical standpoint, the stock is currently in a mildly bullish range and has shown improvement from a mildly bearish trend on October 10, 2024. This is supported by multiple bullish factors such as MACD, Bollinger Band, and KST.

Moreover, Ultracab (India) has an attractive valuation with a ROCE of 14.2 and a 2.5 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. Despite generating a negative return of -7.87% in the past year, the company's profits have increased by 23.2%, resulting in a PEG ratio of 1.1.

However, there are some risks to consider when investing in Ultracab (India). The company has a high debt to EBITDA ratio of 4.05 times, which may affect its ability to service debt. Additionally, its long-term growth may be impacted as net sales have only grown at an annual rate of 14.76% over the last 5 years.

Furthermore, the stock has underperformed the market (BSE 500) in the past year, generating negative returns while the market saw a 35.66% increase. Despite these risks, Ultracab (India) has shown promising financial results and has the potential to continue its positive trend in the future.