Scan Steels Shows Impressive Financial Performance, Attracts Investor Attention and Upgraded to 'Buy' by MarketsMOJO

Scan Steels, a microcap company in the steel/sponge iron/pig iron industry, has recently caught the attention of investors with its impressive performance. MarketsMOJO has upgraded its stock call to 'Buy' on September 23, 2024, citing multiple positive factors.
One of the main reasons for the upgrade is the company's strong financial results in the quarter ending June 2024. With a growth in net profit of 79.65%, Scan Steels has shown a very positive trend. This is further supported by the fact that the company has declared positive results for the last two consecutive quarters. Its PBDIT (profit before depreciation, interest, and taxes) and operating profit to net sales are also at their highest levels, at Rs 24.05 crore and 10.30%, respectively. Additionally, the PBT (profit before tax) less OI (other income) is also at its highest at Rs 17.84 crore.

From a technical standpoint, the stock is currently in a mildly bullish range and has shown improvement from a mildly bearish trend on September 23, 2024. This is backed by multiple bullish factors such as MACD, Bollinger Band, and KST.

Moreover, Scan Steels has an attractive valuation with a ROCE (return on capital employed) of 6.6 and an enterprise value to capital employed ratio of 0.9. The stock is also trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 58.11%, its profits have risen by a staggering 2811%.

It is worth noting that the majority of shareholders in Scan Steels are non-institutional investors, indicating a strong interest from retail investors. This has also contributed to the stock's market-beating performance, with a return of 58.11% in the last year, compared to the market (BSE 500) return of 40.49%.

However, there are some risks associated with investing in Scan Steels. The company's long-term growth may be affected as its operating profit has shown a negative growth rate of -22.65% over the last five years. This is something investors should keep in mind while making their investment decisions.

Overall, with its impressive financial performance, attractive valuation, and market-beating returns, Scan Steels is a stock worth considering for investors looking to diversify their portfolio with a microcap company in the steel industry.