Tirupati Foam Receives 'Hold' Rating from MarketsMOJO, Technical Trend Improves

Tirupati Foam, a microcap company in the miscellaneous industry, has recently received a 'Hold' rating from MarketsMOJO on September 2, 2024. This upgrade is based on the company's technical trend, which has improved from Mildly Bullish to Bullish, resulting in a 4.36% return since August 27, 2024. Additionally, the stock's MACD and KST technical factors are also showing a Bullish trend.
One of the reasons for the 'Hold' rating is the company's attractive valuation, with a ROCE of 9.9 and a 1.3 Enterprise value to Capital Employed. 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 41.32%, while its profits have increased by 10.1%. However, the PEG ratio of the company is 2.5, indicating a potential for future growth.

The majority shareholders of Tirupati Foam are the promoters, which can be seen as a positive sign for investors. The company has also shown market-beating performance in the long term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, Tirupati Foam is a high-debt company with weak long-term fundamental strength. Its net sales have only grown by an annual rate of 1.63% and operating profit at 1.03% over the last 5 years. The company's ability to service its debt is also weak, with a poor EBIT to Interest (avg) ratio of 1.50. Additionally, the company's Return on Equity (avg) is at 8.41%, indicating low profitability per unit of shareholders' funds.

In the latest quarter, Jun 24, Tirupati Foam's net sales have fallen by -5.1% at Rs 24.68 crore, and the EPS (Q) is at its lowest at Rs 1.07. This may be a cause for concern for investors, and it is important to keep an eye on the company's future financial performance.

Overall, while Tirupati Foam has shown market-beating performance and has attractive valuations, its high debt and weak long-term fundamentals may be a cause for caution. Investors are advised to do their own research and consult with a financial advisor before making any investment decisions.