Concord Drugs Receives 'Hold' Rating, Shows Improvement

Concord Drugs, a microcap pharmaceutical company, has recently received a 'Hold' rating from MarketsMOJO. The stock, which has been in a bullish range, has shown an improvement in its technical trend from mildly bullish to bullish on January 3, 2024. The MACD and KST technical factors also indicate a bullish trend.
One of the main reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 7.6 and an enterprise value to capital employed ratio of 1.4. The stock is currently trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 62.05%, while its profits have increased by 72%. The PEG ratio of the company stands at 0.5, indicating a market-beating performance in the long term as well as the near term.

However, the company's long-term fundamental strength is weak with a -4.38% CAGR growth in net sales over the last 5 years. Additionally, its ability to service its debt is poor with a low EBIT to interest ratio of 1.55. The return on equity for the company is also low at 2.66%, indicating low profitability per unit of shareholders' funds.

In the latest quarter, the company's net sales were at its lowest at Rs 7.53 crore. While the stock has shown strong performance in the past, investors should carefully consider the company's weak long-term fundamentals before making any investment decisions. This is not a recommendation to buy or sell the stock, but rather a factual analysis of Concord Drugs' current standing in the market.