MarketsMOJO Upgrades MIC Electronics to 'Hold' Based on Recent Financial Performance

MarketsMOJO has upgraded its stock call on MIC Electronics to 'Hold' based on the company's recent financial performance. The company has shown a growth in net profit of 58.87% and has declared positive results for the last 5 consecutive quarters. The PAT (HY) has also increased to Rs 51.56 crore and the ROCE (HY) is at its highest at 9.54%. The net sales for the quarter have also seen a growth of 52.56%.
Technically, the stock is in a bullish range and has shown improvement since August 5, 2024, generating a return of -2.89%. Multiple factors such as MACD, KST, and DOW are also bullish for the stock.

Over the last 3 years, the stock has consistently outperformed BSE 500 and has generated a return of 205.74%. However, the company's long-term fundamental strength is weak with a CAGR growth in net sales of 67.34% over the last 5 years. The company also has a high debt to EBITDA ratio of -1.00 times, indicating a low ability to service debt. The return on equity (avg) is also low at 1.00%, showing low profitability per unit of shareholders' funds.

The stock is currently trading at a premium compared to its historical valuations and has a PEG ratio of 0.1. This may indicate an expensive valuation for the stock. Additionally, the promoters have decreased their stake in the company by -1.12% over the previous quarter, which could signify reduced confidence in the future of the business.

Based on these factors, MarketsMOJO has upgraded its stock call on MIC Electronics to 'Hold'. While the company has shown positive financial performance in recent quarters, its long-term fundamentals and promoter confidence may be cause for concern. Investors are advised to carefully consider these factors before making any investment decisions.