Palm Jewels Receives 'Hold' Rating from MarketsMOJO, Short-Term Growth but Long-Term Concerns

Palm Jewels, a microcap company in the diamond and gold jewellery industry, has recently received a 'Hold' rating from MarketsMOJO on November 18, 2024. This upgrade comes as the company has shown positive results for the last 5 consecutive quarters, with its PBT LESS OI(Q) at the highest of Rs 0.28 cr, PAT(Q) at Rs 0.24 cr, and NET SALES(Q) growing at 21.3%.
Technically, the stock is in a mildly bullish range with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Additionally, with a ROCE of 5, the company has a very attractive valuation with a 1.6 Enterprise value to Capital Employed. The stock is also currently trading at a discount compared to its average historical valuations.

In the past year, Palm Jewels has generated a return of 61.49%, outperforming the BSE 500. However, its long-term fundamental strength is weak with an average Return on Equity (ROE) of 2.85% and poor growth in operating profit over the last 5 years. The company's ability to service its debt is also weak with a poor EBIT to Interest (avg) ratio of 0.57.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -3.89% over the previous quarter. Currently, promoters hold 43.36% of the company, which may signify reduced confidence in the future of the business.

Overall, while Palm Jewels has shown positive results in the short term, its long-term fundamental strength and promoter confidence are areas of concern. Investors are advised to hold their position in the stock and monitor its performance closely.