RCF's Stock Call Upgraded to 'Hold' by MarketsMOJO on June 5, 2024

Rashtriya Chemicals & Fertilizers (RCF) is a midcap company in the fertilizer industry. Recently, MarketsMOJO has upgraded its stock call on RCF to 'Hold' on June 5, 2024.
The decision to hold the stock is based on several factors. Firstly, RCF has shown healthy long-term growth with an annual increase of 13.83% in net sales and 35.64% in operating profit. Additionally, the technical trend for the stock has improved from mildly bullish to bullish on June 5, 2024. This is supported by factors such as MACD, KST, and OBV, which are all bullish.

Furthermore, RCF has a fair valuation with a ROCE of 3.7 and an enterprise value to capital employed ratio of 1.5. The stock is currently trading at a discount compared to its historical valuations. However, it is important to note that while the stock has generated a return of 37.83% in the past year, its profits have decreased by -78.1%.

Despite this, RCF has consistently outperformed the BSE 500 index in the last 3 annual periods. However, the company has declared negative results for the last 5 consecutive quarters. Its PAT (HY) has grown at a rate of -71.28%, while its interest (HY) has increased by 20.59%. The company's ROCE (HY) is also at its lowest at 5.62%.

It is interesting to note that despite its size, domestic mutual funds hold only 0.22% of RCF's shares. This could indicate that they are either not comfortable with the current price or the business itself. However, domestic mutual funds have the capability to conduct in-depth research on companies, so their small stake may also signify potential for growth in the future.

In conclusion, while RCF has shown strong long-term growth and technical trends, its recent negative results and low ROCE may be a cause for concern. Investors should carefully consider all factors before making a decision on whether to hold or sell their RCF stocks.