COSCO (India) Receives 'Sell' Rating from MarketsMOJO, Weak Fundamentals and High Debt to EBITDA Ratio Cited

COSCO (India), a microcap company in the leather industry, has recently received a 'Sell' rating from MarketsMOJO on June 11, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a -11.00% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.71 times, indicating a low ability to service debt. The return on equity (avg) of 7.72% also suggests low profitability per unit of shareholders' funds.
Despite declaring positive results for the last 4 consecutive quarters, with a higher PAT (HY) of Rs 2.00 cr and the highest net sales (Q) of Rs 49.19 cr, the stock is technically in a mildly bullish range. Multiple factors, such as MACD, KST, and OBV, are also bullish for the stock.

However, with a ROCE of 9.1, the stock is fairly valued with a 1.8 enterprise value to capital employed. It is also currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 91.12%, while its profits have risen by 252%. The PEG ratio of the company is 0.1, indicating a potential undervaluation.

The majority shareholders of COSCO (India) are the promoters, and the company has shown market-beating performance in the long term as well as the near term. Along with generating a return of 91.12% in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months. While the stock may have potential for growth, investors should carefully consider the company's current financial situation before making any investment decisions.