Shriram Properties Receives 'Hold' Rating Amid Bullish Trend and Attractive Valuations

Shriram Properties, a smallcap company in the construction and real estate industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes as the stock has shown a bullish trend and has improved technically since September 26, 2024.
The stock has multiple bullish factors, including MACD, DOW, and OBV. Additionally, with a ROCE of 5.2, the company has an attractive valuation with a 1.5 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, despite generating a return of 43.22% in the past year, the company's profits have only risen by 3.3%, resulting in a high PEG ratio of 9.2.

On the other hand, Shriram Properties has weak long-term fundamental strength due to operating losses and poor long-term growth. Its operating profit has only grown by an annual rate of 2.87% over the last 5 years, and it has a high Debt to EBITDA ratio of 8.40 times, indicating a low ability to service debt.

In the latest quarter, the company's results have been flat, with a significant decrease in net sales and PBT LESS OI. The operating profit to interest ratio is also at its lowest at -0.13 times.

Interestingly, despite being a smallcap company, domestic mutual funds hold only 1.04% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth on-the-ground research on companies.

Overall, while Shriram Properties has shown a bullish trend and has attractive valuations, its weak long-term fundamental strength and low interest from domestic mutual funds suggest a 'Hold' rating for now. Investors should keep an eye on the company's performance and future developments before making any investment decisions.