Vishwaraj Sugar Industries Receives 'Hold' Rating After Positive Q1 Results

Vishwaraj Sugar Industries, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending March 2024. The company's PBT LESS OI(Q) has grown by 191.9% to Rs 9.45 crore, while its PAT(Q) has grown by 126.1% to Rs 2.30 crore.
Technically, the stock is in a mildly bullish range and has shown improvement from a sideways trend on 15th July 2024. The MACD and Bollinger Band technical factors also indicate a bullish trend. Additionally, with a ROCE of 6.8, the stock is attractively valued with a 1.1 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 4.11%, while its profits have risen by 160.6%. The PEG ratio of the company is 0.2, indicating a potential for growth.

However, the company's majority shareholders are non-institutional, which may raise concerns for some investors. The company also has weak long-term fundamental strength, with a -3.85% CAGR growth in operating profits over the last 5 years. It also has a high Debt to EBITDA ratio of 4.45 times, indicating a low ability to service debt. The return on equity (avg) of 9.33% also signifies low profitability per unit of shareholders' funds.

In the last year, Vishwaraj Sugar Industries has underperformed the market, generating a return of 4.11% compared to the market's (BSE 500) return of 37.76%. While the company's recent positive results and attractive valuation may make it a hold for some investors, its weak long-term fundamentals and underperformance in the market may be a cause for concern. Investors are advised to carefully consider these factors before making any investment decisions.