Chartered Logistics Receives 'Hold' Rating After Positive Q2 Results

Chartered Logistics, a microcap logistics company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive results in June 2024, with a higher PAT of Rs 2.27 crore and the highest net sales and PBDIT in the quarter.
Technically, the stock is in a bullish range and has shown improvement from a mildly bullish trend on October 31, 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV indicate a bullish trend for the stock.

With a ROCE of 2.5, the stock is fairly valued with an enterprise value to capital employed ratio of 2. However, it is currently trading at a premium compared to its historical valuations. Despite this, the stock has generated a return of 112.72% in the past year, outperforming the market (BSE 500) returns of 34.33%.

The majority shareholders of Chartered Logistics are non-institutional investors, indicating a strong market performance. However, the company's long-term fundamental strength is weak, with a -9.36% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 9.61 times, indicating a low ability to service debt. The return on equity (average) of 1.83% also signifies low profitability per unit of shareholders' funds.

Overall, while Chartered Logistics has shown a strong market performance in the past year, its long-term fundamentals and high debt levels may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.