Sarveshwar Foods Receives 'Hold' Rating from MarketsMOJO, Positive Financial Results Drive Upgrade

Sarveshwar Foods, a smallcap FMCG company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's positive financial results for the last four consecutive quarters. The company's PAT (HY) has grown by 53.50%, while PBT LESS OI (Q) has grown by 49.19%. Additionally, the company has a low debt-to-equity ratio of 1.18 times.
Technically, the stock is in a bullish range and has shown a 4.91% return since the upgrade on 30-Sep-24. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish trend for the stock.

In the past year, Sarveshwar Foods has outperformed the market (BSE 500) with a return of 89.81%. However, its long-term fundamental strength is weak, with a -5.31% CAGR growth in operating profits over the last five years. The company also has a high debt-to-EBITDA ratio of 8.70 times, indicating a low ability to service debt. The return on equity (avg) is at 4.92%, signifying low profitability per unit of shareholders' funds.

The company's ROCE of 9.9 suggests an expensive valuation with a 2.4 enterprise value to capital employed. While the stock has shown a significant return in the past year, its profits have only risen by 115%, resulting in a PEG ratio of 0.7.

Institutional investors have also decreased their stake in Sarveshwar Foods by -1.05% over the previous quarter, collectively holding 0% of the company. This decrease in participation by institutional investors may indicate a lack of confidence in the company's fundamentals.

Investors should carefully consider these factors before making any investment decisions regarding Sarveshwar Foods. While the stock has shown a strong performance in the past year, its long-term fundamentals and institutional investor participation may be cause for concern.