Cords Cable Industries Downgraded to 'Hold' by MarketsMOJO Due to Weak Debt Servicing and Low Profitability

Cords Cable Industries, a microcap company in the cable industry, has recently been downgraded to a 'Hold' by MarketsMOJO on July 19, 2024. This decision was based on various factors, including the company's high management efficiency with a ROCE of 15.54% and positive results in March 2024, with the highest ROCE (HY) at 15.54%, net sales (Q) at Rs 179.22 crore, and PBDIT (Q) at Rs 12.09 crore.
Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Additionally, the company has an attractive valuation with a 1.6 enterprise value to capital employed and is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 144.10%, while its profits have risen by 39.5%, resulting in a PEG ratio of 0.8.

The majority shareholders of Cords Cable Industries are the promoters, and the company has shown market-beating performance in the long term as well as the near term. Along with a 144.10% return 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 profitability per unit of shareholders' funds, with a return on equity (avg) of 4.95%. Furthermore, the company 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.

Overall, while Cords Cable Industries has shown positive results and high management efficiency, the company's weak ability to service its debt and low profitability may have contributed to its downgrade to a 'Hold' by MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.