Chemcon Speciality Chemicals Upgraded to 'Hold' by MarketsMOJO, But Poor Long-Term Growth Raises Concerns

Chemcon Speciality Chemicals, a smallcap company in the chemicals industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This decision was based on various factors, including the company's low Debt to Equity ratio, which is currently at 0 times. Additionally, the stock is currently in a bullish range and the technical trend has improved from sideways on 17-Sep-24. Other bullish indicators for the stock include MACD, Bollinger Band, and KST.
However, the company has shown poor long-term growth, with an annual operating profit growth rate of -8.77% over the last 5 years. In addition, the company has declared negative results for the last 5 consecutive quarters, with a PAT (HY) of Rs 8.27 crore, which has grown at a rate of -49.51%. The net sales for the last quarter were also at a low of Rs 45.52 crore, and the non-operating income was 51.02% of the profit before tax (PBT).

The company also has a high valuation, with a ROE of 3.9 and a price to book value of 2.2. This is further highlighted by the fact that the stock is currently trading at a premium compared to its average historical valuations. Despite this, the stock has generated a negative return of -2.67% in the past year, while its profits have fallen by -47.6%.

It is also worth noting that despite being a smallcap company, domestic mutual funds hold only 1.07% of the company. This could indicate that they are not comfortable with the current price or the business, as they have the capability to conduct in-depth research on companies.

Furthermore, Chemcon Speciality Chemicals has consistently underperformed against the benchmark over the last 3 years. Along with generating a negative return of -2.67% in the last year, the stock has also underperformed the BSE 500 in each of the last 3 annual periods.

In conclusion, while Chemcon Speciality Chemicals has shown some positive indicators, such as a low Debt to Equity ratio and bullish technical trends, it is important to consider the company's poor long-term growth and consistent underperformance against the benchmark. Investors may want to hold off on investing in this stock until there is more stability and growth in the company's performance.