Shivalik Bimetal Controls Upgraded to 'Hold' by MarketsMOJO for Strong Management and Growth Potential

Shivalik Bimetal Controls, a smallcap company in the iron and steel industry, has recently been upgraded to a 'Hold' by MarketsMOJO on July 9, 2024. This upgrade is based on the company's strong management efficiency, ability to service debt, and healthy long-term growth.
One of the key factors contributing to the 'Hold' rating is the company's high return on equity (ROE) of 22.49%, indicating efficient management of its resources. Additionally, Shivalik Bimetal Controls has a low debt to EBITDA ratio of 0.45 times, showcasing its strong ability to service debt.

In terms of growth, the company has shown a consistent increase in operating profit, with an annual growth rate of 51.59%. This is a positive sign for investors looking for long-term growth potential.

From a technical standpoint, the stock is currently in a mildly bullish range and has shown improvement from a sideways trend on July 9, 2024. The MACD and Bollinger Band technical factors also indicate a bullish trend.

It is worth noting that the majority shareholders of Shivalik Bimetal Controls are promoters, which can be seen as a vote of confidence in the company's future prospects.

However, the company did report flat results in March 2024, with its debtors turnover ratio at a low of 4.47 times and PBDIT (profit before depreciation, interest, and taxes) at Rs 21.78 crore. The operating profit to net sales ratio was also at its lowest at 17.05%.

With a ROE of 24.7, the company's valuation is considered very expensive with a price to book value of 10.6. However, the stock is currently trading at a discount compared to its average historical valuations, which could be seen as a potential buying opportunity.

In the past year, Shivalik Bimetal Controls has underperformed the market, generating negative returns of -8.20% while the market (BSE 500) has generated returns of 38.60%. However, the company's profits have still increased by 6.5%, resulting in a PEG ratio of 6.6.

Overall, while Shivalik Bimetal Controls may have underperformed in the past year, its strong management efficiency, ability to service debt, and healthy long-term growth make it a 'Hold' for now. Investors should keep an eye on the company's performance and future developments in the iron and steel industry.