Zodiac Energy Receives 'Buy' Rating and Shows Strong Growth Potential in Engineering Industry

Zodiac Energy, a smallcap company in the engineering and industrial equipment industry, has recently received a 'Buy' rating from MarketsMOJO on August 13, 2024.
This upgrade is based on the company's healthy long-term growth, with an annual operating profit growth rate of 49.63%. In addition, Zodiac Energy has declared outstanding results for the last four consecutive quarters, with the highest net sales and PBDIT in the last quarter at Rs 106.63 crore and Rs 8.82 crore, respectively. The technical trend for the stock has also improved from Mildly Bullish to Bullish on August 13, 2024, with multiple factors such as Bollinger Band, KST, and DOW indicating a positive outlook.

In terms of market performance, Zodiac Energy has outperformed the market (BSE 500) with a return of 573.29% in the last year, compared to the market's return of 34.08%.

However, there are some risks to consider. The company's ROCE of 8.8 indicates a very expensive valuation, with an enterprise value to capital employed ratio of 16.3. Additionally, the stock is currently trading at a discount compared to its average historical valuations. While the stock has generated a high return of 573.29% in the past year, its profits have only risen by 244%, resulting in a PEG ratio of 0.5.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company, which could suggest 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, this could be a potential red flag for investors.

Overall, Zodiac Energy's recent 'Buy' rating and strong financial performance make it an attractive investment opportunity. However, investors should carefully consider the risks involved before making any investment decisions.