Venkys (India) Receives 'Hold' Rating from MarketsMOJO, Shows Strong Debt Servicing Ability and Profit Growth

Venkys (India), a smallcap FMCG company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 0.28 times. In addition, the company's profits have shown significant growth, with PAT(Q) at Rs 33.51 crore, a growth of 89.3%, and PBDIT(Q) at Rs 50.03 crore, the highest in the industry. The operating profit to net sales ratio is also at its highest at 5.58%.
While the technical trend for Venkys (India) is currently sideways, it has improved from being mildly bearish on 18 May 2024. The key technical factor, MACD, has also been sideways since 18 May 2024. The stock is currently trading at a premium compared to its average historical valuations, with a fair valuation and a price to book value of 1.9. However, the company's long term growth has been poor, with an annual growth rate of -26.70% for operating profit over the last 5 years.

Despite being a smallcap company, Venkys (India) has low ownership from domestic mutual funds, with only 0.13% of the company's shares held by them. This could indicate that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies. In the last 1 year, the stock has underperformed the market, with a return of 11.43% compared to the market's return of 36.04%.

Overall, while Venkys (India) has shown strong financials and a fair valuation, its poor long term growth and low ownership from domestic mutual funds may be a cause for concern. Investors may want to hold onto their current positions and monitor the company's performance closely before making any further investment decisions.