Asian Hotels (North) Upgraded to 'Hold' Status

Asian Hotels (North) has recently caught the attention of investors and analysts as its stock call has been upgraded to 'Hold' by MarketsMOJO on 2023-12-18. The company, which operates in the hotel industry and falls under the microcap category, has shown a technically bullish trend with multiple factors supporting its growth.
One of the key reasons for the upgrade is the stock's attractive valuation, with a ROCE of 0.4 and an enterprise value to capital employed ratio of 1.2. This indicates that the stock is trading at a discount compared to its historical valuations. Additionally, the company has shown strong performance in the past year, generating a return of 152.61% while its profits have increased by 48.6%.

Not only has the stock performed well in the short term, but it has also outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months. However, the company's high debt, with a debt-to-equity ratio of 6.29 times, is a cause for concern and indicates weak long-term fundamental strength. This is further supported by the company's poor growth in net sales and operating profit over the last 5 years.

Moreover, the company has reported losses and a negative ROE, which may be a red flag for potential investors. In addition, the recent flat results in September 2023 may also be a cause for caution.

It is worth noting that 100% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets. Therefore, while the stock has shown promising growth and has caught the attention of investors, it is important to consider all factors before making any investment decisions.