MarketsMOJO downgrades Ashiana Housing to 'Hold' despite strong quarterly results

Ashiana Housing, a smallcap real estate company, has recently been downgraded to a 'Hold' by MarketsMOJO on August 12, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
Despite this, Ashiana Housing has shown outstanding results in the last quarter, with a growth in Net Sales of 159.86%. In fact, the company has declared positive results for the last 9 consecutive quarters. Its Net Sales for the quarter were at Rs 289.67 crore, showing a growth of 159.86%, while its PBT LESS OI for the quarter was at Rs 17.49 crore, showing a growth of 191.99%. Additionally, its ROCE for the half year was at a high of 11.96%.

Technically, the stock is currently in a Mildly Bullish range, with multiple factors such as MACD, KST, and DOW being bullish. The majority shareholders of the company are the promoters, indicating their confidence in the company's performance.

Ashiana Housing has also shown a market-beating performance, with a return of 84.58% in the last year, compared to the market (BSE 500) returns of 35.35%. However, its long-term growth has been poor, with an annual growth rate of only 28.68% in Operating profit over the last 5 years.

The company's ROE is at 10.8, indicating a very expensive valuation with a 4.9 Price to Book Value. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 84.58%, its profits have risen by 199.1%, resulting in a PEG ratio of 0.2.

Overall, while Ashiana Housing has shown strong performance in the last quarter and has a bullish outlook, its long-term growth and expensive valuation may be a cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.