Kothari Fermentation & Biochem receives 'Hold' rating after strong Q1 results.

Kothari Fermentation & Biochem, a microcap FMCG company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending June 2024, with a PAT (Q) of Rs 1.10 crore and EPS (Q) of Rs 0.73, the highest in its history.
Technically, the stock is currently in a Mildly Bullish range and both its MACD and KST technical factors are also Bullish. Additionally, with a ROCE of 9.4, the stock is considered to have an attractive valuation with a 1.8 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

Despite underperforming the market in the last year, with a return of only 6.68%, Kothari Fermentation & Biochem has seen a significant increase in profits of 59.4%. The majority shareholders of the company are its promoters.

However, the company has shown weak long-term fundamental strength with a -19.22% CAGR growth in Operating Profits over the last 5 years. This may have contributed to its underperformance in the market, with a return of only 6.68% in the last year compared to the market's return of 26.05%.

Overall, while Kothari Fermentation & Biochem may not have the strongest long-term fundamentals, its recent positive results and attractive valuation make it a 'Hold' for now. Investors should keep an eye on the company's performance in the coming quarters to make a more informed decision.