Mawana Sugars Receives 'Hold' Rating from MarketsMOJO, Shows Strong Growth and Attractive Valuation

Mawana Sugars, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO on April 22, 2024. This upgrade is based on the company's healthy long-term growth, with an annual operating profit growth rate of 34.99%. Additionally, the company has shown positive results in December 2023, with a significant increase in PBT and PAT. Its ROCE (Return on Capital Employed) is also at its highest at 11.77%, indicating a strong financial position.
One of the main reasons for the 'Hold' rating is the company's attractive valuation, with a ROCE of 6.8 and an enterprise value to capital employed ratio of 1.1. This is further supported by the fact that the stock is currently trading at a discount compared to its historical valuations. In the past year, while the stock has only generated a return of 1.65%, its profits have increased by a staggering 1109.6%, resulting in a PEG ratio of 0.

However, there are some concerns regarding the company's ability to service its debt, as it has a high debt to EBITDA ratio of 3.41 times. This could potentially impact its long-term growth, as the net sales have only grown at an annual rate of 2.83% over the last 5 years. Additionally, the company has a low return on equity of 2.96%, indicating low profitability per unit of shareholders' funds.

From a technical standpoint, the stock is currently in a mildly bearish range, with both the MACD and KST technical factors showing a bearish trend. Furthermore, the stock has underperformed the market in the last year, with a return of only 1.65%, compared to the market's (BSE 500) return of 37.60%.

It is important to note that the majority shareholders of Mawana Sugars are the promoters, which could potentially impact the company's decision-making and future growth. Overall, while the company has shown promising growth and attractive valuations, there are also some concerns that should be taken into consideration before making any investment decisions.