Shankar Lal Rampal Dye-Chem Receives Upgraded Stock Call from MarketsMOJO

Shankar Lal Rampal Dye-Chem, a microcap trading company, has recently received an upgraded stock call from MarketsMOJO. The company's stock has been upgraded to 'Hold' on September 23, 2024.
The upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 0.34 times. This indicates a healthy long-term growth potential for the company, as evidenced by its annual Net Sales growth rate of 17.89%. In fact, in the latest quarter, the company declared very positive results with its highest Net Sales of Rs 98.73 crore and highest PBDIT of Rs 4.81 crore. The Operating Profit to Net Sales ratio also reached its highest at 4.87%.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. Although the trend has improved from mildly bearish on September 23, 2024, the stock has only generated a return of 2.47% since then.

With a ROE of 9.6, the stock is currently trading at a very expensive valuation with a Price to Book Value of 6.9. This is significantly higher than its average historical valuations. Additionally, while the stock has generated a return of 0.95% in the past year, its profits have only risen by 14.8%, resulting in a high PEG ratio of 4.8.

It is worth noting that despite its small size, domestic mutual funds hold only 0% of the company. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company.

In the last year, Shankar Lal Rampal Dye-Chem has underperformed the market, with a return of only 0.95% compared to the market's (BSE 500) return of 40.49%. This could be a cause for concern for potential investors.

Overall, while the company has shown strong financials and potential for growth, its expensive valuation and underperformance in the market may make it a risky investment. Investors should carefully consider all factors before making any decisions regarding Shankar Lal Rampal Dye-Chem's stock.