EDC Receives 'Hold' Rating from MarketsMOJO After Strong September Results

Energy Development Company (EDC) has recently received a 'Hold' rating from MarketsMOJO, a leading stock analysis and research firm. This upgrade comes after the company reported very positive results in September 2024, with a growth in net profit of 122.79%. EDC also has the highest operating profit to interest ratio and net sales among its peers in the power generation/distribution industry.
Technically, the stock is currently in a mildly bullish range and has shown improvement from a mildly bearish trend on November 28, 2024. The MACD and Bollinger Band technical factors are also bullish, indicating a positive outlook for the stock.

The majority shareholders of EDC are its promoters, which is a positive sign for investors. The stock has also outperformed the market (BSE 500) with a return of 44.61% in the last year, compared to the market's return of 26.36%.

However, EDC's long-term fundamental strength is weak, with an average return on capital employed (ROCE) of 4.88%. The company has also shown poor growth in net sales over the last 5 years and has a high debt to EBITDA ratio, indicating a low ability to service debt.

In terms of valuation, EDC is currently trading at an expensive price with a 1.1 enterprise value to capital employed ratio. However, it is still trading at a discount compared to its average historical valuations. Despite the stock's strong performance in the past year, its profits have only risen by 174.9%, resulting in a low PEG ratio of 0.3.

Overall, while EDC's recent results and technical factors are positive, its weak long-term fundamentals and high valuation may make it a hold for now. Investors should keep an eye on the company's future performance and make informed decisions based on their risk appetite.