Caspian Corporate Services Adjusts Evaluation Amid Strong Growth and Leverage Concerns

Caspian Corporate Services, a microcap player in the Non-Banking Financial Company (NBFC) sector, has recently undergone an evaluation adjustment that reflects a shift in its quality grade. This adjustment is attributed to various underlying financial metrics that highlight the company's performance over time.
The company has demonstrated significant sales growth over the past five years, with a remarkable increase of 803.10%. Additionally, EBIT growth during the same period stands at 192.75%, indicating a robust operational performance. The average EBIT to interest ratio is recorded at 3.06, suggesting a solid ability to cover interest expenses. However, the debt metrics reveal a debt to EBITDA ratio of 18.90 and a net debt to equity ratio of 1.07, which may raise concerns regarding leverage.

Caspian's tax ratio is noted at 5.42%, and the dividend payout ratio is 47.97%, reflecting a balanced approach to shareholder returns. The company has maintained a zero percentage of pledged shares and institutional holding, indicating a strong promoter backing. The average return on capital employed (ROCE) is 6.70%, while the return on equity (ROE) is notably high at 38.00%.

Despite these positive indicators, the stock has faced challenges, particularly in the last year, where it has underperformed relative to broader market indices. The recent evaluation adjustment underscores the complexities of Caspian Corporate Services' financial landscape.

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