COSCO (India) shows positive results and bullish trend, but long-term fundamentals raise concerns

COSCO (India) has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on May 7, 2024. This microcap company in the leather industry has shown positive results for the last three consecutive quarters, with a higher PAT (HY) of Rs 1.81 crore and the highest operating profit to interest (Q) at 2.40 times. Its PBDIT (Q) is also at its highest at Rs 2.97 crore.
Technically, the stock is in a bullish range and has shown improvement from mildly bullish on May 7, 2024. Multiple factors such as MACD, KST, and OBV are also bullish for the stock.

With a ROCE of 9.1, the stock has a fair valuation and is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 84.89%, while its profits have risen by 44.8%. The PEG ratio of the company is 1.3.

The majority shareholders of COSCO (India) are its promoters, indicating their confidence in the company's performance. The stock has also shown market-beating performance in the long term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak, with a -11.00% CAGR growth in operating profits over the last 5 years. It also has a high debt to EBITDA ratio of 4.71 times, indicating a low ability to service debt. The company's return on equity (avg) is also at a low 7.72%, signifying low profitability per unit of shareholders' funds.

Overall, while COSCO (India) has shown positive results and a bullish trend, its long-term fundamental strength and debt situation may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.