Tirupati Foam Upgraded to 'Hold' Rating by MarketsMOJO, Attractive Valuation and Short-Term Potential

Tirupati Foam, a microcap company in the miscellaneous industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO on September 16, 2024. This upgrade is based on the company's recent technical trend, which has improved from Mildly Bullish to Bullish, resulting in a 9.23% return since September 11, 2024.
One of the main reasons for this upgrade is the company's attractive valuation, with a ROCE of 9.9 and a 1.4 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations. However, it is important to note that the majority shareholders of Tirupati Foam are promoters.

In terms of performance, Tirupati Foam has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a return of 51.20% in the last year alone. However, the company's long-term fundamental strength is weak, with poor growth in net sales and operating profit over the last 5 years. The company also has a high level of debt and a weak ability to service it, with a poor EBIT to Interest ratio.

In the most recent quarter, Tirupati Foam's net sales have fallen by -5.1%, and the EPS is at its lowest at Rs 1.07. This indicates a flat performance for the company in June 2024.

Overall, while Tirupati Foam may have potential for short-term gains, its long-term fundamental strength and high debt levels should be considered before making any investment decisions. MarketsMOJO's 'Hold' rating reflects a neutral stance on the stock, based on its current technical trend and valuation.