Supertex Industries Receives 'Hold' Rating After Strong Quarterly Results

Supertex Industries, a microcap textile company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company has shown positive results for the last four consecutive quarters. In the past nine months, the company's net sales have grown by an impressive 61.99%, reaching Rs 82.58 crore.
Technically, the stock is currently in a mildly bullish range, with the technical trend improving from sideways on October 23, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock. Additionally, with a ROCE of 4.2, the company has a very attractive valuation with a 0.7 Enterprise value to Capital Employed. This means that the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, the stock has generated a return of 27.67%, while its profits have only risen by 2%. This gives the company a PEG ratio of 0.7, indicating that it is undervalued. However, it is worth noting that the majority of the company's shareholders are non-institutional investors.

On the downside, Supertex Industries has a weak long-term fundamental strength, with a CAGR growth of only 4.88% in net sales over the last five years. The company also has a high debt to EBITDA ratio of 5.84 times, indicating a low ability to service debt. Furthermore, the company's return on equity (avg) is only 1.16%, signifying low profitability per unit of shareholders' funds.

Overall, while Supertex Industries has shown positive growth in recent quarters, its long-term fundamentals and high debt levels may be cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.