Bharat Parenterals Receives 'Hold' Rating from MarketsMOJO, Shows Strong Debt-Servicing Ability

Bharat Parenterals, a smallcap pharmaceutical company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.02 times.
The stock is currently in a bullish range, with technical trends showing improvement from mildly bullish on August 1, 2024. Multiple factors such as MACD, Bollinger Band, KST, and DOW are also indicating a bullish outlook for the stock.

In terms of performance, Bharat Parenterals has outperformed the market (BSE 500) with a return of 310.02% in the last year, compared to the market's return of 37.25%. However, the company's long-term growth has been poor, with net sales growing at an annual rate of 3.33% and operating profit at 4.16% over the last 5 years.

The company also reported negative results in March 2024, with a fall in PAT(Q) at Rs -0.30 crore, a decrease of -112.0%. The ROCE(HY) is also at its lowest at 6.19%, and PBDIT(Q) at Rs 1.00 crore.

With a ROCE of 3.9, Bharat Parenterals is currently trading at a very expensive valuation, with an enterprise value to capital employed ratio of 3.5. The stock is also trading at a premium compared to its average historical valuations.

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

Overall, while Bharat Parenterals has shown strong debt-servicing ability and a bullish trend in the short term, its poor long-term growth and expensive valuation may be a cause for concern for investors. It is important to conduct thorough research and analysis before making any investment decisions.