Som Distilleries & Breweries downgraded to 'Hold' by MarketsMOJO, technical trend sideways

Som Distilleries & Breweries, a smallcap company in the breweries industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 6, 2024. This decision was based on the company's current performance and future potential.
The company has shown healthy long-term growth with an annual growth rate of 26.63% in Net Sales. In fact, in the quarter ending June 24, the company declared very positive results with a growth in Net Sales of 33.26%. This trend has been consistent for the past 10 quarters, indicating a strong and stable performance.

However, the technical trend for the stock is currently sideways, showing no clear price momentum. In fact, the technical trend has deteriorated from mildly bullish on August 2, 2024, and has generated a negative return of -1.78% since then.

On the valuation front, Som Distilleries & Breweries has a very attractive ROCE of 17.9 and a 3.3 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations. Despite generating a negative return of -13.51% in the past year, the company's profits have risen by 43.5%, resulting in a PEG ratio of 0.7.

Promoters have shown high confidence in the future of the business by increasing their stake in the company by 0.53% in the previous quarter. They currently hold 35.26% of the company, which is a positive sign for investors.

However, Som Distilleries & Breweries has a high Debt to EBITDA ratio of 4.63 times, indicating a low ability to service debt. The company has also underperformed the market (BSE 500) in the past year, generating negative returns of -13.51% while the market has generated returns of 32.89%.

In conclusion, while Som Distilleries & Breweries has shown strong growth and profitability, the current technical trend and high debt levels may be a cause for concern. Investors are advised to hold onto their stocks and monitor the company's performance closely.