EPL LIMITED Downgraded to 'Hold' by MarketsMOJO, Positive Financials and Technicals Remain

EPL LIMITED, a midcap company in the plastic products industry, has recently been downgraded to a 'Hold' by MarketsMOJO. This decision was based on various factors, including the company's high management efficiency with a ROCE of 15.66% and its strong ability to service debt with a low Debt to EBITDA ratio of 0.82 times.
In addition, the company has shown positive results in September 2024, with its ROCE (HY) reaching a high of 16.47%, OPERATING PROFIT TO INTEREST (Q) at 7.58 times, and DPR (Y) at 66.48%. These factors have contributed to the stock being in a Mildly Bullish range, with technical indicators such as MACD, KST, and OBV also showing bullish signals.

Furthermore, EPL LIMITED has a high institutional holding of 22.9%, indicating that these investors have better capability and resources to analyze the company's fundamentals compared to retail investors. This has also resulted in the stock outperforming the market (BSE 500) with a return of 35.51% in the last year, compared to the market's return of 24.46%.

However, the company's long-term growth has been poor, with its operating profit only growing at an annual rate of -0.03% over the last 5 years. Additionally, with a ROCE of 15.3, the stock is currently trading at an expensive valuation with a 3.1 Enterprise value to Capital Employed. Despite this, the stock is still trading at a discount compared to its average historical valuations.

In conclusion, while EPL LIMITED has shown strong financial performance and positive technical indicators, its long-term growth and expensive valuation may be a cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.