Nirlon Upgraded to 'Hold' by MarketsMOJO After Positive Results in June 2024

Nirlon, a smallcap company in the miscellaneous industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This upgrade comes after the company's positive results in June 2024, with its ROCE (HY) reaching a high of 27.99% and its net sales (Q) at Rs 156.51 crore. Additionally, the company's operating profit to interest (Q) is also at a high of 4.05 times.
Technically, the stock is currently in a mildly bullish range, with the trend improving from mildly bearish on 23-Sep-24. The key technical factor, KST, has also been mildly bullish since 23 Sep 2024.

Institutional investors have also shown an increasing interest in Nirlon, with their stake in the company increasing by 0.89% over the previous quarter. They now collectively hold 15.24% of the company, indicating their confidence in its fundamentals.

However, Nirlon is a high debt company with a debt to equity ratio (avg) of 2.26 times. Its long-term growth has also been poor, with net sales growing at an annual rate of 15.11% and operating profit at 19.13% over the last 5 years.

With a ROCE of 28.9, the company's valuation is considered very expensive with a 3.3 enterprise value to capital employed. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 1.93%, its profits have risen by 6.3%, resulting in a PEG ratio of 2.4. Additionally, the company also offers a high dividend yield of 6.2%.

In the last 1 year, Nirlon has underperformed the market, with a return of 1.93% compared to the market's (BSE 500) return of 36.98%. While the stock may not have shown significant growth in the past year, its recent upgrade to 'Hold' by MarketsMOJO and its positive results in June 2024 may indicate potential for future growth. However, it is important to note the company's high debt and poor long-term growth before making any investment decisions.