MarketsMOJO downgrades Alembic Pharmaceuticals to 'Hold' due to mixed performance and fair valuation

Alembic Pharmaceuticals, a midcap pharmaceutical company, 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 17.56% and its strong ability to service debt with a low Debt to EBITDA ratio of 0.80 times. Additionally, Alembic Pharmaceuticals has declared positive results for the last 4 consecutive quarters, with its highest net sales, PBDIT, and PBT LESS OI in the last quarter.
Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, with a ROCE of 11.4, the stock is fairly valued with a 3.8 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations, making it an attractive option for investors.

The majority shareholders of Alembic Pharmaceuticals are its promoters, who have a strong hold on the company. This has resulted in the stock's market-beating performance, with a return of 101.71% in the last year, compared to the market (BSE 500) returns of 36.79%. However, the company has shown poor long-term growth, with an annual rate of -4.18% for operating profit over the last 5 years.

Overall, while Alembic Pharmaceuticals has shown strong financial performance and a bullish trend in the short term, its long-term growth may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.