Kemistar Corporation Shows Improved Sales Amid Ongoing Long-Term Profitability Concerns

Kemistar Corporation, a microcap player in the specialty chemicals industry, has recently undergone an adjustment in evaluation, reflecting changes in its technical indicators. The stock's technical trend has shifted from a sideways movement to a mildly bullish stance, indicating a potential change in market sentiment.
In terms of key financial metrics, Kemistar Corporation reported a notable increase in net sales for the first nine months of FY25-26, reaching Rs 13.61 crore. The company's debtors turnover ratio also stood out, achieving a high of 10.43 times for the half-year period, suggesting effective management of receivables.

Despite these positive indicators, the company faces challenges in its long-term fundamental strength, with a -9.12% CAGR growth in operating profits over the past five years. Additionally, the company's ability to service its debt appears constrained, as evidenced by a low EBIT to interest ratio of 0.74. The return on equity (ROE) averages 3.58%, reflecting modest profitability relative to shareholders' funds.

Overall, while Kemistar Corporation has demonstrated market-beating performance in both the near and long term, it continues to trade at a premium compared to its peers, with a PEG ratio of 7.3.

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