MarketsMOJO upgrades Ras Resorts & Apart Hotels to 'Hold' rating amid bullish trend

Ras Resorts & Apart Hotels, a microcap company in the hotel industry, has recently received a 'Hold' rating from MarketsMOJO on February 20, 2024. This upgrade comes as the stock is currently in a bullish range and the technical trend has improved from mildly bullish on February 19, 2024. Several factors, such as MACD, Bollinger Band, KST, and OBV, are also indicating a bullish outlook for the stock.

One of the main reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 6.2 and an enterprise value to capital employed ratio of 0.9. 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 48.58%, outperforming the market (BSE 500) returns of 34.87%. This strong performance can be attributed to the majority shareholders being promoters of the company.

However, the company's long-term fundamental strength is weak with an average ROCE of 2.48%. The net sales have only grown at an annual rate of 7.88% and the operating profit at 3.71% over the last 5 years, indicating poor long-term growth. Additionally, the company's ability to service its debt is weak with a poor EBIT to interest ratio of 0.64.

In the latest quarter, the company's results were flat with the lowest debtors turnover ratio at 9.82 times and PBDIT (profit before depreciation, interest, and taxes) at Rs 0.17 crore. The PBT (profit before tax) less OI (other income) was also at its lowest at Rs -0.11 crore.

Overall, while the stock has shown a strong market-beating performance in the past year, its long-term fundamental strength and growth potential are weak. Investors are advised to hold onto their positions for now and monitor the company's performance closely.