Aarti Surfactants Receives 'Hold' Rating from MarketsMOJO, Shows Positive Financial Results

Aarti Surfactants, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on April 10, 2024. This upgrade is based on the company's positive financial results for the past 5 quarters, with a growth of 108.11% in PAT (9M) and the highest operating profit to interest ratio of 4.58 times. Additionally, the PBDIT (Q) has also reached its highest at Rs 16.72 crore.

Technically, the stock is currently in a mildly bullish range and has shown improvement from a mildly bearish trend on April 10, 2024. One key technical factor, the Bollinger Band, has been bullish since the same date.

With a ROCE of 13.6, Aarti Surfactants has a very attractive valuation with a 2.3 enterprise value to capital employed. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 17.75%, while its profits have risen by 105.8%. The PEG ratio of the company stands at 0.3.

However, the company has weak long-term fundamental strength with a -19.43% CAGR growth in operating profits over the last 5 years. It also has a low ability to service debt, with a high debt to EBITDA ratio of 3.36 times.

Despite its size, domestic mutual funds hold only 0% of the company, which may indicate that they are not comfortable with the current price or the business. This is significant as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last 1 year, Aarti Surfactants has underperformed the market, generating a return of 17.75% compared to the market (BSE 500) returns of 40.46%. This may be a cause for concern for potential investors.

Overall, while Aarti Surfactants has shown positive financial results in recent quarters and has a bullish technical trend, it also has weak long-term fundamentals and has underperformed the market. Investors should carefully consider these factors before making any investment decisions.