Orient Beverages Receives 'Hold' Rating from MarketsMOJO, Shows Potential for Growth

Orient Beverages, a microcap company in the FMCG industry, has recently received a 'Hold' rating from MarketsMOJO on July 8, 2024. This upgrade is based on the company's positive results in the March 2024 quarter, with the highest net sales of Rs 39.46 crore, highest PAT of Rs 2.68 crore, and highest EPS of Rs 12.35.
The stock is currently in a bullish range and has shown improvement in its technical trend since July 2, 2024, with a return of -4.54%. Multiple factors, such as MACD, KST, and OBV, indicate a bullish outlook for the stock.

The majority shareholders of Orient Beverages are its promoters, and the company has shown market-beating performance in both the long term and near term. In the last year, the stock has generated a return of 200.60%, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

However, Orient Beverages is a high debt company with weak long-term fundamental strength. Its operating profit has declined at an annual rate of -10.20% over the last 5 years, and its debt to equity ratio is at 2.53 times. The company's return on equity is also low at 6.77%, indicating low profitability per unit of shareholders' funds.

Moreover, with a ROCE of 0.7, the stock is currently trading at a very expensive valuation with an enterprise value to capital employed ratio of 1.8. However, it is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a high return of 200.60%, its profits have declined by -97.9%.

Overall, Orient Beverages shows potential for growth in the future, but its high debt and weak long-term fundamentals may pose a risk for investors. MarketsMOJO's 'Hold' rating suggests a neutral stance on the stock, and investors should carefully consider all factors before making any investment decisions.