CCL International Receives 'Sell' Rating from MarketsMOJO, Weak Fundamentals Pose Risk for Investors

CCL International, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO on March 11, 2024. This downgrade is based on weak long-term fundamental strength, with a -215.66% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is weak, with a poor EBIT to Interest (avg) ratio of 0.25. This signifies a potential risk for investors.
Furthermore, the company has only been able to generate a low Return on Equity (avg) of 2.32%, indicating low profitability per unit of shareholders' funds. While there were positive results in December 2023, with a growth of 167.25% in net sales and a higher PAT of Rs 0.41 cr, these factors alone may not be enough to outweigh the overall weak performance of the company.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, and OBV showing a bullish trend. However, with a ROCE of 2.5, the stock is fairly valued with a 1.2 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

Despite generating a return of 87.11% in the last year, which is significantly higher than the market (BSE 500) returns of 37.37%, the majority shareholders of CCL International are promoters. This may raise concerns for potential investors as the company's performance is heavily reliant on the decisions and actions of the promoters.

In conclusion, while CCL International may have shown market-beating performance in the past year, its weak long-term fundamentals and low profitability may pose a risk for investors. The recent 'Sell' rating from MarketsMOJO serves as a cautionary signal for those considering investing in this microcap trading company.