DCM Nouvelle's Stock Upgraded to 'Hold' by MarketsMOJO After Positive Results

DCM Nouvelle, a microcap textile company, has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on August 21, 2024. This upgrade comes after the company's 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 currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Additionally, with a ROCE of 2.3, the stock is attractively valued with a 1.2 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

Over the past year, DCM Nouvelle's stock has outperformed the market (BSE 500) with a return of 52.99%. However, its long-term fundamental strength is weak, with a -8.30% CAGR growth in Operating Profits over the last 5 years. The company also has a high Debt to EBITDA ratio of 11.48 times, indicating a low ability to service debt. Furthermore, the company has reported losses, resulting in a negative ROE.

The majority shareholders of DCM Nouvelle are its promoters, indicating their confidence in the company's future prospects. While the stock has shown a strong performance in the past year, investors should carefully consider the company's weak long-term fundamentals before making any investment decisions.