Unjha Formulations Receives 'Hold' Rating from MarketsMOJO After Positive Performance

Unjha Formulations, a microcap pharma company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in December 2023, with a 31.67% growth in net sales and a higher PAT of Rs 0.45 crore for the first 9 months of the fiscal year. The PBDIT for the quarter also reached its highest at Rs 0.42 crore.
Technically, the stock is currently in a bullish range and the trend has improved from mildly bullish on April 29, 2024. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

Unjha Formulations has a majority of non-institutional shareholders, and its market performance has been beating the benchmark in both the long term and near term. In the last 1 year, the stock has generated a return of 60.89% and has outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak with a 2.11% CAGR growth in operating profits over the last 5 years. Additionally, its ability to service its debt is also weak with a poor EBIT to Interest (avg) ratio of 0.20. The stock also has an expensive valuation with a price to book value of 3.9 and a ROE of 9.1.

Despite the recent positive performance, the stock is currently trading at a premium compared to its average historical valuations. In the past year, while the stock has generated a high return, its profits have declined by -21%. Based on these factors, MarketsMOJO has upgraded the stock to a 'Hold' rating.