Aarey Drugs & Pharmaceuticals Receives 'Hold' Rating After Positive Q4 Results

Aarey Drugs & Pharmaceuticals, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on May 6, 2024. This upgrade comes after the company declared positive results in December 2023, breaking a streak of 7 consecutive negative quarters.
The company's net sales for the quarter stood at Rs 76.48 crore, showing a growth of 22.43%. Its PBDIT (Profit Before Depreciation, Interest, and Taxes) also reached its highest at Rs 2.71 crore, with an operating profit to net sales ratio of 3.54%. These numbers indicate a strong performance by the company in the recent quarter.

Technically, the stock is currently in a mildly bullish range and has shown improvement since May 2, 2024, generating a return of -1.73%. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

With a ROCE (Return on Capital Employed) of 2.3, the stock is currently trading at an attractive valuation with an enterprise value to capital employed ratio of 1.1. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 91.83%, while its profits have risen by 59.3%. The PEG ratio of the company stands at 0.6, indicating a potential undervaluation.

The majority shareholders of Aarey Drugs & Pharmaceuticals are the promoters, which is a positive sign for investors. The stock has also shown market-beating performance in the long term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak, with a -38.02% CAGR growth in operating profits over the last 5 years. It has also been able to generate a low return on equity (avg) of 6.74%, indicating low profitability per unit of shareholders' funds.

Overall, Aarey Drugs & Pharmaceuticals has shown a positive performance in the recent quarter and has potential for growth in the future. However, investors should also consider the weak long-term fundamentals of the company before making any investment decisions.