DCM Nouvelle Receives 'Sell' Rating Due to Weak Fundamentals and High Debt

DCM Nouvelle, a microcap textile company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -8.30% CAGR growth in operating profits over the last 5 years. Additionally, DCM Nouvelle has a high debt to EBITDA ratio of 11.48 times, indicating a low ability to service debt. The company has also reported losses, resulting in a negative return on equity.
Despite these factors, DCM Nouvelle did report positive results in June 2024, with a growth of 166.0% in PBT LESS OI(Q) at Rs 1.60 crore and a higher PAT(HY) at Rs 8.62 crore. Technically, the stock is in a mildly bullish range, with both MACD and KST technical factors showing a bullish trend.

In terms of valuation, DCM Nouvelle has a fair ROCE of 2.3 and an enterprise value to capital employed ratio of 1.1. The stock is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 29.90%, while its profits have risen by 184.3%. The PEG ratio of the company is 1.8.

It is worth noting that the majority shareholders of DCM Nouvelle are the promoters themselves. This may indicate a lack of interest from external investors. However, it is important to consider all factors before making any investment decisions.