DE Nora India Upgraded to 'Hold' by MarketsMOJO, But Concerns Remain

DE Nora India, a smallcap company in the electrodes and welding industry, has recently been upgraded to a 'Hold' by MarketsMOJO on July 3, 2024. This decision is based on several factors, including the company's low Debt to Equity ratio, which is currently at 0 times on average.

One of the key reasons for this upgrade is the healthy long-term growth of the company. In fact, its operating profit has grown at an annual rate of 89.58%. Additionally, the stock is currently in a bullish range, with technical trends showing improvement from mildly bullish on July 3, 2024. Factors such as MACD, Bollinger Band, and OBV are all bullish for the stock.

However, it is worth noting that the company has recently declared negative results in March 2024, after two consecutive positive quarters. The net sales for the quarter have fallen by -24.1%, while the profit after tax for the half-year has grown by -29.13%. The PBT less OI for the quarter has also fallen by -19.4%.

With a ROE of 17.7, the company currently has a very expensive valuation, with a price to book value of 9.4. This is significantly higher than its average historical valuations. Moreover, while the stock has generated a return of 4.81% in the past year, its profits have fallen by -6.3%.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company. This could signify that they are either not comfortable with the current price or the business itself. Additionally, the stock has underperformed the market in the last year, generating a return of only 4.81%, compared to the market's (BSE 500) return of 37.61%.

In conclusion, while DE Nora India has shown promising growth and technical trends, its recent negative results and expensive valuation may be cause for concern. The lack of interest from domestic mutual funds and underperformance in the market further adds to the cautious outlook for the stock. Investors may want to hold off on investing in this company until there is more clarity on its financial performance.