Indoco Remedies Receives 'Hold' Rating from MarketsMOJO, Shows Strong Debt Servicing Ability and Bullish Technical Trend

Indoco Remedies, a smallcap pharmaceutical company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on several factors that indicate a neutral and informative outlook for the company.
One of the key reasons for the 'Hold' rating is Indoco Remedies' strong ability to service debt. With a low Debt to EBITDA ratio of 1.40 times, the company is in a good position to manage its debt. Additionally, the company has shown healthy long-term growth, with its operating profit growing at an annual rate of 154.96%.

From a technical standpoint, the stock is currently in a bullish range. The technical trend has improved from sideways to a -3.09% return since 25-Sep-24. Multiple factors, such as MACD, Bollinger Band, and KST, also indicate a bullish trend for the stock.

Moreover, with a ROCE of 8.7, the stock is considered to be attractively valued with a 2.3 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, it is important to note that while the stock has generated a return of 5.70% in the past year, its profits have fallen by -46%.

Another positive aspect for Indoco Remedies is its high institutional holdings at 20.14%. This indicates that these investors have better capability and resources to analyze the company's fundamentals compared to retail investors.

On the other hand, the company has declared negative results for the last 7 consecutive quarters, with a fall in net sales of -4.04% in Jun 24. The PAT(Q) at Rs 2.62 cr has also fallen by -88.5%, and the ROCE(HY) is at its lowest at 9.11%. Additionally, the DEBT-EQUITY RATIO(HY) is at its highest at 0.61 times.

Overall, Indoco Remedies has underperformed the market in the last 1 year, with a return of 5.70% compared to the market's (BSE 500) return of 39.48%. While the company has shown some positive aspects, it is important to consider the negative results and underperformance in the past year before making any investment decisions.