Vivid Global Industries Receives 'Hold' Rating After Positive Results, But Long-Term Concerns Remain

Vivid Global Industries, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in June 2024, with a higher PAT (HY) of Rs 0.15 crore and the highest net sales (Q) of Rs 13.19 crore.
Technically, the stock is currently in a bullish range and has shown improvement since September 23, 2024, generating a return of -4.64%. Multiple factors, such as MACD, Bollinger Band, KST, and OBV, indicate a bullish trend for the stock.

However, the majority of shareholders in the company are non-institutional, which may indicate a lack of confidence from larger investors. Additionally, the company's long-term fundamental strength is weak, with a -158.54% CAGR growth in operating profits over the last 5 years. The company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 1.43.

Furthermore, the stock is currently trading at a very expensive valuation, with a price to book value of 1.3. However, it is trading at a fair value compared to its average historical valuations. In the past year, the stock has generated a return of -1.16%, while its profits have risen by 88%. The PEG ratio of the company is 0.1, indicating a potential undervaluation.

Despite the recent upgrade, Vivid Global Industries has consistently underperformed against the benchmark over the last 3 years. This, coupled with its underperformance against BSE 500 in the last 3 annual periods, may be a cause for concern for investors.

In conclusion, while the recent upgrade to 'Hold' by MarketsMOJO may indicate some positive developments for Vivid Global Industries, the company's weak long-term fundamentals and underperformance against the benchmark may warrant caution for potential investors.