MarketsMOJO Upgrades Avadh Sugar & Energy to 'Hold' Rating Based on Technical Factors and Attractive Valuation

Avadh Sugar & Energy, a smallcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on various technical factors, such as the stock being in a bullish range and improvements in the technical trend.
The company also has an attractive valuation with a ROCE of 11.7 and a 1.2 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 34.44%, while its profits have risen by 11.6%. However, the PEG ratio of the company is 1.1, indicating a potential for future growth.

On the downside, Avadh Sugar & Energy has a high Debt to EBITDA ratio of 3.99 times, which may affect its ability to service debt. The company also has a poor long-term growth rate, with Net Sales growing at an annual rate of 6.20% and Operating profit at 19.08% over the last 5 years.

In addition, the company has declared negative results for the last 2 consecutive quarters, with a significant decrease in PAT(Q) at Rs 8.69 crore, falling at -60.8%. The OPERATING CF(Y) is also at its lowest at Rs -76.94 crore, and the OPERATING PROFIT TO INTEREST (Q) is at its lowest at 1.93 times.

Despite these challenges, Avadh Sugar & Energy has caught the attention of domestic mutual funds, who hold a small stake of only 0.03% in the company. This may indicate that they are not comfortable with the current price or the business, as they have the capability to conduct in-depth research on companies.

Overall, while Avadh Sugar & Energy may have some positive factors, it is important to consider the potential risks and challenges before making any investment decisions. The 'Hold' rating from MarketsMOJO suggests a neutral stance on the stock, and investors should carefully evaluate all aspects before making any decisions.