DMCC Speciality Chemicals Receives 'Hold' Rating from MarketsMOJO, Shows Strong Debt Servicing Ability

DMCC Speciality Chemicals, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on July 8, 2024. This upgrade is based on the company's strong ability to service its debt, with a low Debt to EBITDA ratio of 1.05 times.
Technically, the stock is currently in a Mildly Bullish range, with an improved trend from Sideways on July 3, 2024. Since then, it has generated a return of -1.43%. The MACD and KST technical factors also indicate a Bullish trend for the stock.

However, DMCC Speciality Chemicals has shown poor long-term growth, with an annual rate of -24.03% for Operating profit over the last 5 years. In the latest quarter, the company's net sales have fallen by -12.99%, with the lowest Operating profit to Interest ratio at 1.92 times and PBT less OI at Rs -0.78 cr.

The company's ROCE stands at 7.1, indicating an expensive valuation with a 3.1 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 0.16%, its profits have risen by 67.2%. The PEG ratio of the company is 1, which suggests a fair valuation.

It is worth noting that despite its small size, domestic mutual funds hold only 0.02% of the company. This could indicate that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, DMCC Speciality Chemicals has underperformed the market, with a return of 0.16% compared to the market (BSE 500) returns of 37.98%. This could be a cause for concern for investors.

Overall, while DMCC Speciality Chemicals has shown some positive technical trends and a strong ability to service its debt, its poor long-term growth and underperformance in the market may make it a 'Hold' for now. Investors should keep an eye on the company's future performance and conduct their own research before making any investment decisions.