Zuari Industries Receives 'Hold' Rating, Shows Bullish Trend and Attractive Valuation

Zuari Industries, a smallcap trading company, has recently received a 'Hold' rating from MarketsMOJO. The stock has shown a bullish trend and has improved from being mildly bullish to technically bullish on 26-Aug-24. This is supported by various factors such as MACD, Bollinger Band, KST, and OBV.
One of the main reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 0.4 and an enterprise value to capital employed ratio of 0.5. Additionally, the stock is currently trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 162.76%, while its profits have increased by 165.8%. This is reflected in the company's low PEG ratio of 0.4.

Zuari Industries has also shown strong performance in the long term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months. However, the company's long term fundamental strength is weak with an average ROCE of 0.13%. Its net sales have only grown at an annual rate of 3.02% and operating profit at 19.06% over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 118.94 times, indicating a low ability to service debt.

In the latest quarter, Zuari Industries reported flat results with a fall in PAT(Q) at Rs -33.35 crore, a decrease of -23873.3%. This could be a cause for concern for investors.

It is also worth noting that despite being a smallcap company, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, while Zuari Industries has shown a bullish trend and attractive valuation, its weak long term fundamental strength and poor performance in the latest quarter may be a cause for concern. Investors should carefully consider these factors before making any investment decisions.