Mawana Sugars Receives 'Hold' Rating After Impressive Q4 Results and Bullish Technical Indicators

Mawana Sugars, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending March 2024. The company's PBT LESS OI(Q) has grown by an impressive 755.7%, while its PAT(Q) has seen a growth of 336.8%. Additionally, its PBDIT(Q) has reached its highest at Rs 81.40 cr.
Technically, the stock is in a bullish range and the trend has improved from mildly bullish to bullish on 15-Jul-24. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

With a ROCE of 5.8, the stock is fairly valued with an enterprise value to capital employed ratio of 1.1. It is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 24.13%, while its profits have risen by 162.4%. The PEG ratio of the company is also at a low of 0.1.

The majority shareholders of Mawana Sugars are its promoters. However, the company has weak long-term fundamental strength with a -7.52% CAGR growth in operating profits over the last 5 years. It also has a high debt to EBITDA ratio of 4.04 times, indicating a low ability to service debt. The return on equity (avg) of the company is at a low of 4.23%, signifying low profitability per unit of shareholders' funds.

In the last year, the stock has underperformed the market with a return of 24.13%, while the market (BSE 500) has seen a return of 37.76%. Overall, while the recent results and technical indicators are positive, the company's weak long-term fundamentals and underperformance in the market may warrant a 'Hold' rating for now.