Vadilal Industries Receives 'Hold' Rating from MarketsMOJO, Neutral Stance on Stock

Vadilal Industries, a smallcap FMCG company, has recently received a 'Hold' rating from MarketsMOJO on June 19, 2024. This downgrade is based on various factors that suggest a neutral stance on the stock.
One of the main reasons for the 'Hold' rating is the healthy long-term growth of the company. With an annual growth rate of 32.30% in operating profit, Vadilal Industries has shown consistent positive results for the last four quarters. In fact, its profit after tax has grown by a significant 89.23% in the last year.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, DOW, and OBV indicating a bullish trend. Additionally, with a ROCE of 26.4 and a very attractive valuation of 4.8 Enterprise value to Capital Employed, the stock is trading at a discount compared to its historical valuations.

Over the past year, Vadilal Industries has generated a return of 83.81%, outperforming the BSE 500 index. However, its profits have only risen by 51.6%, resulting in a low PEG ratio of 0.4. This suggests that the stock may not have much potential for future growth.

Furthermore, despite its consistent returns over the last three years, domestic mutual funds hold only 0% of the company. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company due to its small size.

In conclusion, while Vadilal Industries has shown strong growth and performance in the past, the current rating of 'Hold' suggests a neutral stance on the stock. Investors should carefully consider all factors before making any decisions regarding this smallcap FMCG company.