MarketsMOJO upgrades Star Paper Mills to 'Hold' rating, showing stable financials and bullish trend

Star Paper Mills, a microcap company in the paper and paper products industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO on July 30, 2024. This upgrade comes as the company has shown a low Debt to Equity ratio, indicating a stable financial position.
The stock is currently in a bullish range and has shown a positive technical trend since July 29, 2024, with a return of 1.34%. Multiple factors such as MACD, Bollinger Band, KST, and OBV have contributed to this bullish sentiment.

Attractive valuation is another reason for the 'Hold' rating, with a ROE of 10.1 and a price to book value of 0.6. However, the stock is currently trading at a premium compared to its historical valuations.

Despite a 45.80% return in the past year, the company's profits have fallen by -12.2%. This can be attributed to poor management efficiency, with a low ROE of 8.44%. This signifies low profitability per unit of shareholders' funds.

In terms of long-term growth, Star Paper Mills has shown a slow growth rate, with net sales growing at an annual rate of 3.31% and operating profit at 1.76% over the last 5 years.

The company has also declared negative results for the last 3 consecutive quarters, with a significant decline in PBT LESS OI(Q) at Rs 3.75 crore and PAT(Q) at Rs 14.36 crore. The lowest net sales (Q) at Rs 100.43 crore is also a cause for concern.

Additionally, 47.21% of promoter shares are pledged, which can put downward pressure on the stock prices in falling markets. Overall, while the company shows potential for growth, it is currently facing challenges in terms of profitability and financial stability. Investors are advised to hold their positions and monitor the company's performance closely.