Mawana Sugars Receives 'Hold' Rating from MarketsMOJO, Despite Positive Growth and Promoter Stability

Mawana Sugars, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO on May 21, 2024. This upgrade is based on the company's healthy long-term growth, with an annual operating profit growth rate of 34.99%. In addition, the company has shown positive results in December 2023, with a significant increase in PBT LESS OI(Q) at Rs 28.66 crore, growing at 1590.9%, and PAT(Q) at Rs 17.61 crore, growing at 128.9%. The company's ROCE(HY) is also at its highest at 11.77%.
Despite these positive factors, there are some concerns for investors to consider. Mawana Sugars has a high debt to EBITDA ratio of 3.41 times, indicating a low ability to service debt. In addition, the company has shown poor long-term growth, with a net sales growth rate of only 2.83% over the last 5 years. The return on equity (avg) is also low at 2.96%, indicating low profitability per unit of shareholders' funds.

From a technical standpoint, the stock is currently in a mildly bearish range, with factors such as MACD, KST, and DOW all showing a bearish trend. Furthermore, the stock has underperformed the market in the last year, with a return of only 5.03%, compared to the market (BSE 500) return of 36.54%.

It is worth noting that the majority shareholders of Mawana Sugars are the promoters, which may provide some stability for the company. However, investors should carefully consider the company's financials and market performance before making any investment decisions. Overall, while the stock may have potential for growth, it is currently recommended to hold off on investing in Mawana Sugars.