Tinna Rubber & Infrastructure Downgraded to 'Hold' by MarketsMOJO, Despite Strong Growth and Positive Results

Tinna Rubber & Infrastructure, a smallcap company in the rubber products industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 26, 2024. This decision was based on various factors, including the company's healthy long-term growth and outstanding results in the last quarter.
The company has shown consistent growth in its operating profit, with an annual rate of 38.55%. Its net profit has also seen a significant increase of 135.62%, leading to positive results for the last five consecutive quarters. Tinna Rubber & Infrastructure has also recorded the highest operating cash flow of Rs 59.16 crore and return on capital employed (ROCE) of 27.93% in the last quarter.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. The company has also delivered consistent returns over the last three years, outperforming the BSE 500 index in each of the last three annual periods. With a market capitalization of Rs 2,912 crore, Tinna Rubber & Infrastructure is the biggest company in the sector, constituting 22.57% of the entire industry's market share. Its annual sales of Rs 418.57 crore account for 13.83% of the industry's total sales.

However, with a ROCE of 26.5, the company's valuation is considered very expensive, with an enterprise value to capital employed ratio of 14.8. Despite this, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 354.44%, while its profits have increased by 118.5%. This has resulted in a PEG ratio of 0.5, indicating that the stock may be undervalued.

It is worth noting that despite its size, domestic mutual funds hold only 0% of Tinna Rubber & Infrastructure's shares. This could signify that they are either not comfortable with the current price or have not conducted in-depth research on the company. As a smallcap company, Tinna Rubber & Infrastructure may have potential for growth in the future, but for now, MarketsMOJO has downgraded its stock to a 'Hold'.