Synergy Green Industries Downgraded to 'Hold' by MarketsMOJO: What Investors Need to Know

Synergy Green Industries, a microcap company in the castings/forgings industry, has recently been downgraded to a 'Hold' by MarketsMOJO on September 12, 2024. This decision was based on various factors, including the company's healthy long-term growth, positive results for the last 6 consecutive quarters, and technically bullish trend.
One of the main reasons for the 'Hold' rating is the company's healthy long-term growth, with net sales growing at an annual rate of 13.27% and operating profit at 199.93%. Additionally, the company has declared positive results for the last 6 consecutive quarters, with its operating cash flow at its highest at Rs 37.69 Cr and return on capital employed at its highest at 22.87%.

The stock is also technically in a bullish range, with multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV all indicating a bullish trend. Since August 13, 2024, the stock has generated a return of 19.02%.

Furthermore, the company has a fair valuation with a ROCE of 23.3 and a 6.4 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 105.07%, while its profits have risen by 134.3%, resulting in a PEG ratio of 0.5.

However, there are some concerns regarding the company's ability to service debt, as it has a high debt to EBITDA ratio of 3.08 times. This may affect its profitability and financial stability in the long run.

Another factor to consider is that despite its size, domestic mutual funds hold only 0% of the company. This may indicate that they are not comfortable with the company's current price or its business, as they have the capability to conduct in-depth research on companies.

In conclusion, while Synergy Green Industries has shown market-beating performance in the long term and near term, there are some concerns regarding its ability to service debt and the lack of interest from domestic mutual funds. Investors may want to hold off on buying or selling the stock until further developments.