CCL International Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Debt Concerns

CCL International, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, poor ability to service its debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the 'Sell' rating is the company's -215.66% CAGR growth in operating profits over the last 5 years. This indicates a significant decline in the company's financial performance. Additionally, the company's EBIT to Interest ratio of 0.25 is a cause for concern as it shows a weak ability to pay off its debt.

On a positive note, CCL International has declared positive results for the last 2 consecutive quarters, with a growth in net sales of 86.61% in March 2024. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

In terms of valuation, the stock is trading at a discount compared to its average historical valuations, with a ROCE of 2.5 and an attractive 1.3 Enterprise value to Capital Employed. The company's profits have also risen by 205.8% in the past year, resulting in a low PEG ratio of 0.2.

It is worth noting that the majority shareholders of CCL International are the promoters, which may raise concerns about the company's corporate governance.

Despite a market-beating performance in the long term, with 64.64% returns in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months, MarketsMOJO's downgrade to 'Sell' suggests caution for potential investors in CCL International.