Vinayak Polycon International Receives 'Hold' Rating After Strong Quarterly Results

Vinayak Polycon International, a microcap company in the plastic products industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared positive results for the last 9 consecutive quarters, with its highest ROCE (HY) at 8.11%, highest debtors turnover ratio (HY) at 4.83 times, and highest PAT (Q) at Rs 0.07 cr.
The stock is currently in a mildly bullish range, with technical trends improving from sideways on 13-May-24. The MACD and Bollinger Band technical factors also indicate a bullish trend. Additionally, with a ROCE of 7.1, the stock is attractively valued with a 1.4 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

However, the company's long-term fundamental strength is weak, with an average ROCE of 0% and poor growth in net sales and operating profit over the last 5 years. It also has a high debt to EBITDA ratio, indicating a low ability to service debt.

In the past year, while the market (BSE 500) has generated a return of 35.58%, Vinayak Polycon International has underperformed with negative returns of -19.63%. The majority shareholders of the company are promoters, which may have contributed to the underperformance.

Overall, while the recent positive results and technical trends may make Vinayak Polycon International a hold for now, its weak long-term fundamentals and underperformance in the market should be considered before making any investment decisions.