Reliance Chemotex Industries Receives 'Hold' Rating from MarketsMOJO, Stock Shows Mildly Bullish Trend

Reliance Chemotex Industries, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on June 13, 2024. This upgrade is based on various technical indicators that suggest a mildly bullish trend for the stock. Since May 18, 2024, the stock has shown an improvement from a bearish trend and has generated a return of 11.03%.
The company's valuation is also attractive with a ROCE of 5.7 and an enterprise value to capital employed ratio of 1.1. Additionally, the stock is currently trading at a discount compared to its historical valuations. However, despite a positive stock performance, the company's profits have fallen by -74.2% in the past year.

One of the major concerns for Reliance Chemotex Industries is its weak ability to service its debt, with a poor EBIT to interest ratio of 1.87. This indicates that the company may struggle to meet its debt obligations. Moreover, the company has also shown poor long-term growth with a low annual growth rate of 2.59% in net sales and 15.91% in operating profit over the last 5 years.

In the last 6 consecutive quarters, the company has declared negative results, with the lowest ROCE at 6.08%, highest debt-equity ratio at 2.10 times, and lowest cash and cash equivalents at Rs 50.59 crore. This further highlights the company's financial struggles.

Institutional investors have also decreased their stake in the company by -2.26% in the previous quarter, collectively holding only 0.11% of the company. This suggests that these investors, who have better resources and capabilities to analyze company fundamentals, have lost confidence in Reliance Chemotex Industries.

Overall, the stock has underperformed the market in the last 1 year, generating a return of only 14.99% compared to the market's return of 36.82%. With various concerns surrounding the company's financials and performance, it may be wise for investors to hold off on investing in Reliance Chemotex Industries for now.