Chartered Logistics Receives 'Hold' Rating After Positive Q2 Results and Bullish Trend

Chartered Logistics, a microcap logistics company, has recently received a 'Hold' rating from MarketsMOJO on September 18, 2024. This upgrade comes after the company reported positive results in June 2024, with a higher profit after tax of Rs 3.21 crore and the highest net sales of Rs 22.08 crore in the quarter. Additionally, the company's PBDIT also saw a significant increase to Rs 2.13 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on September 18, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, also indicate a bullish outlook for the stock.

With a ROCE of 2.5, the stock is fairly valued and has an enterprise value to capital employed ratio of 2. However, it is trading at a premium compared to its historical valuations. In the past year, the stock has generated a return of 112.17%, while its profits have increased by 230%. The PEG ratio of the company is also at a low of 0, indicating a potential undervaluation.

The majority of the company's shareholders are non-institutional investors, and the stock has outperformed the market (BSE 500) with a return of 112.17% in the last year, compared to the market's return of 34.92%.

However, the company's long-term fundamental strength is weak, with a -21.38% CAGR growth in operating profits over the last 5 years. It also has a high debt to EBITDA ratio of 9.61 times, indicating a low ability to service debt. The company's return on equity (average) is also at a low of 0.05%, indicating low profitability per unit of shareholders' funds.

In conclusion, while Chartered Logistics has shown positive results and a bullish trend in the short term, its weak long-term fundamentals and high debt may pose a risk for investors. It is advisable to hold the stock for now and monitor its performance closely.