Hindustan Composites Receives 'Hold' Rating from MarketsMOJO Based on Strong Financials

Hindustan Composites, a microcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO on June 12, 2024. This upgrade is based on the company's low Debt to Equity ratio, which is currently at 0 times.
The technical trend for the stock is currently sideways, indicating no clear price momentum. However, it has improved from being mildly bearish on June 12, 2024 and has generated a return of 4.56% since then.

With a ROE of 3.5, the company has a very attractive valuation with a price to book value of 0.7. This means that 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 35.57%, while its profits have increased by 25.3%. The PEG ratio of the company is also at a favorable level of 0.8.

However, the company has shown poor long-term growth with net sales growing at an annual rate of 8.65% and operating profit at 18.29% over the last 5 years. In the latest quarter, the company's profits have fallen by -11.3% at Rs 7.97 crore.

It is also worth noting that despite being a microcap company, domestic mutual funds hold only 0% of the company. This could indicate that they are either not comfortable with the current price or the business itself. Domestic mutual funds have the capability to conduct in-depth research on companies, making their small stake in Hindustan Composites a significant factor to consider.

Overall, while the company's financials and valuation may seem attractive, the lack of long-term growth and low interest from domestic mutual funds may be a cause for concern. Investors are advised to hold on to their positions for now and keep an eye on any future developments.