Mahindra EPC Irrigation Receives Upgraded Stock Call from MarketsMOJO, Showing Positive Financial Growth

Mahindra EPC Irrigation, a microcap company in the plastic products industry, has recently received an upgraded stock call from MarketsMOJO. The company's stock has been upgraded to 'Hold' on 2024-02-19.
The decision to upgrade the stock is based on the company's positive financial results for the last four consecutive quarters. The company's PAT (profit after tax) has grown at an impressive rate of 667.8%, with the highest net sales and PBDIT (profit before depreciation, interest, and taxes) recorded at Rs 80.29 crore and Rs 3.89 crore respectively.

Technically, the stock is in a bullish range and has shown improvement since 13-Feb-24, generating a return of 3.84%. Multiple factors such as MACD, Bollinger Band, and KST indicate a bullish trend for the stock.

The majority shareholders of Mahindra EPC Irrigation are the promoters, which can be seen as a positive sign for the company's stability and growth potential.

However, the company's long-term fundamental strength is weak, with a -37.01% CAGR growth in operating profits over the last five years. The return on equity (ROE) is also low at 4.66%, indicating low profitability per unit of shareholders' funds.

Moreover, the company's ROCE (return on capital employed) is at 0.1, which suggests an expensive valuation with a 2.2 enterprise value to capital employed. However, 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 42.69%, while its profits have risen by 119.6%. The PEG ratio of the company is 1.1, which indicates a fair valuation for the stock.

In conclusion, while Mahindra EPC Irrigation's stock has been upgraded to 'Hold' by MarketsMOJO, investors should consider the company's weak long-term fundamental strength and expensive valuation before making any investment decisions.