Salasar Techno Engineering Receives 'Hold' Rating from MarketsMOJO, Concerns Over High Debt and Slow Growth

Salasar Techno Engineering, a smallcap company in the industrial equipment engineering industry, has recently received a 'Hold' rating from MarketsMOJO on September 16, 2024.
The stock is currently in a Mildly Bullish range and has shown an improvement in its technical trend from Sideways on September 16, 2024. This is supported by multiple bullish factors such as MACD, Bollinger Band, and KST.

In terms of returns, Salasar Techno Engineering has consistently outperformed the BSE 500 index in the last 3 annual periods, with a remarkable 119.66% return in the last 1 year.

However, the company's high Debt to EBITDA ratio of 2.85 times raises concerns about its ability to service debt. Additionally, its operating profit has only grown at an annual rate of 10.83% over the last 5 years, indicating poor long-term growth.

The company's recent results for June 2024 have been flat, with a significant increase in interest expenses and a low inventory turnover ratio. Furthermore, its operating profit to interest ratio is also at its lowest at 2.35 times.

With a ROCE of 14.6, Salasar Techno Engineering is currently trading at an expensive valuation with a 5.4 Enterprise value to Capital Employed. However, it is still trading at a discount compared to its average historical valuations.

Despite the impressive returns in the past year, the company's profits have only risen by 22.6%, resulting in a high PEG ratio of 5.1. This suggests that the stock may be overvalued.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -2.79% over the previous quarter. Currently, promoters hold 55.97% of the company, which may indicate a lack of confidence in the future of the business.

In conclusion, while Salasar Techno Engineering has shown strong returns in the past year, its high debt and poor long-term growth may be a cause for concern. Investors are advised to hold onto their positions and monitor the company's performance closely.