Zodiac Energy's Strong Growth and Technical Trends Garner Attention from Investors

Zodiac Energy, a smallcap company in the engineering and industrial equipment industry, has recently caught the attention of investors. MarketsMOJO has upgraded its stock call to 'Buy' on July 2, 2024.
One of the main reasons for this upgrade is the company's healthy long-term growth. With an annual growth rate of 49.63% in operating profit and a 253.42% growth in net profit, Zodiac Energy has shown outstanding results in the last quarter of March 2024. In fact, the company has declared positive results for the last four consecutive quarters.

In terms of financials, PBT LESS OI(Q) has grown by 224.45% and NET SALES(Q) has grown by 71.71%. The company's PBDIT(Q) is also at its highest at Rs 8.82 crore. These numbers indicate a strong and consistent performance by Zodiac Energy.

From a technical standpoint, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on July 2, 2024. Multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV are also bullish for the stock.

Zodiac Energy has also outperformed the market, generating a return of 508.31% in the last year, compared to the market's return of 37.36% (BSE 500). However, there are some risks associated with investing in this company. With a ROCE of 8.8, the stock has a very expensive valuation with an enterprise value to capital employed ratio of 16.1. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

Another risk factor is the low ownership of the company by domestic mutual funds. Despite its size, domestic mutual funds hold only 0% of the company, which could indicate that they are not comfortable with the current price or the business. However, it is worth noting that domestic mutual funds have the capability to conduct in-depth research on companies, so their small stake may also signify that they have not yet discovered the potential of Zodiac Energy.

Overall, Zodiac Energy's recent upgrade to a 'Buy' stock call and its strong financial performance make it an attractive investment option. However, investors should also consider the risks associated with the stock before making any investment decisions.