Concord Drugs Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamental Strength

Concord Drugs, a microcap pharmaceutical company, has recently received a 'Sell' rating from MarketsMOJO on January 24, 2024. This downgrade is based on several factors that indicate weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the company's poor net sales growth, with a CAGR of -4.38% over the last 5 years. This indicates a lack of growth and potential for the company. Additionally, Concord Drugs has a weak ability to service its debt, with a low EBIT to Interest ratio of 1.55.

Furthermore, the company's profitability per unit of shareholders' funds is also low, with a Return on Equity of 2.66%. This is a concerning factor for investors.

In terms of recent performance, Concord Drugs reported flat results in September 2023, with the lowest net sales of Rs 7.53 crore. This is another indication of the company's struggling financials.

However, there are some positive technical factors for the stock, with it currently in a mildly bullish range. The MACD and KST technical factors are also bullish, which may provide some hope for investors.

Moreover, the stock has a very attractive valuation with a ROCE of 7.6 and an enterprise value to capital employed ratio of 1.2. It is also trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 30.88%, while its profits have risen by 72%. This has resulted in a PEG ratio of 0.4 for the company, indicating a market-beating performance in the long term as well as the near term.

Overall, while Concord Drugs may have some positive technical factors, the company's weak fundamental strength and recent financial performance have led to a 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.