Zodiac Energy Downgraded to 'Hold' by MarketsMOJO, But Shows Strong Growth and Market-Beating Performance

Zodiac Energy, a smallcap company in the engineering and industrial equipment industry, has recently been downgraded to a 'Hold' by MarketsMOJO on July 8, 2024. This decision was based on the company's healthy long-term growth, with an annual operating profit growth rate of 49.63%. Additionally, the company declared outstanding results in March 2024, with a 253.42% growth in net profit and positive results for the last four consecutive quarters.
The company's PBT LESS OI(Q) has grown at an impressive rate of 224.45%, while NET SALES(Q) has grown at 71.71%. The highest PBDIT(Q) was recorded at Rs 8.82 crore. Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, and DOW indicating a bullish trend.

Zodiac Energy has also shown market-beating performance, generating a return of 480.51% in the last year, significantly higher than the market (BSE 500) returns of 37.98%. However, with a ROCE of 8.8, the stock has a very expensive valuation, with an enterprise value to capital employed ratio of 14.9. Despite this, the stock is currently trading at a discount compared to its average historical valuations.

It is worth noting that despite its size, domestic mutual funds hold only 0% of the company. This could signify that they are either not comfortable with the current price or have not conducted in-depth research on the company. Overall, while Zodiac Energy has shown impressive growth and market-beating performance, investors should carefully consider the company's valuation and the lack of interest from domestic mutual funds before making any investment decisions.