Cords Cable Industries downgraded to 'Hold' by MarketsMOJO due to weak debt servicing and long-term growth

Cords Cable Industries, a microcap company in the cable industry, has recently been downgraded to a 'Hold' by MarketsMOJO on July 30, 2024. This decision was based on various factors, including the company's high management efficiency with a ROCE of 15.54%. Additionally, Cords Cable Industries has shown positive results for the last 3 consecutive quarters, with its highest ROCE at 15.54%, PAT growth at 55.7%, and net sales growth at 27.87%.
Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Furthermore, the company's valuation is attractive with a 1.7 Enterprise value to Capital Employed, and the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 161.72%, while its profits have risen by 51.4%, resulting in a PEG ratio of 0.6.

The majority shareholders of Cords Cable Industries are the promoters, and the company has shown market-beating performance in both the long term and near term. Along with generating a return of 161.72% in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's ability to service its debt is weak, with a poor EBIT to Interest (avg) ratio of 1.33. Additionally, the company has a low Return on Equity (avg) of 4.95%, indicating low profitability per unit of shareholders' funds. Furthermore, Cords Cable Industries has shown poor long-term growth, with net sales growing at an annual rate of 8.54% and operating profit at 0.94% over the last 5 years.

In conclusion, while Cords Cable Industries has shown positive results in the last few quarters and has attractive valuations, the company's weak debt servicing ability and poor long-term growth may have contributed to its downgrade to a 'Hold' by MarketsMOJO. Investors are advised to carefully consider these factors before making any investment decisions.