Coastal Corporation Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results in March 2024

Coastal Corporation, a microcap company in the aquaculture industry, has recently received a 'Hold' rating from MarketsMOJO on July 18, 2024. This upgrade is based on the company's positive results in March 2024, with a higher profit after tax of Rs 1.23 crore and the highest net sales of Rs 116.62 crore in the quarter.
Technically, the stock is currently in a mildly bullish range and has shown improvement since July 16, 2024, generating a return of 11.17%. The Bollinger Band and KST technical factors also indicate a bullish trend for the stock.

Attractive valuation is another factor contributing to the 'Hold' rating, with a ROCE of 2.9 and an enterprise value to capital employed ratio of 1.2. The stock is currently trading at a discount compared to its average historical valuations. However, it is important to note that while the stock has generated a return of 14.19% in the past year, its profits have decreased by -32.9%.

The majority shareholders of Coastal Corporation are non-institutional investors. This, along with the company's weak long-term fundamental strength due to operating losses, raises concerns about its ability to service debt. The high debt to EBITDA ratio of 5.68 times also indicates a low ability to service debt. Additionally, the company's return on capital employed (average) of 9.12% suggests low profitability per unit of total capital.

In the past year, Coastal Corporation has underperformed the market, with a return of 14.19% compared to the market's (BSE 500) return of 36.87%. This may be a cause for concern for investors, but the 'Hold' rating suggests that the stock may still have potential for growth in the future.