MarketsMOJO Downgrades Thomas Cook (India) to 'Hold' Amid Mixed Financial Performance

Thomas Cook (India) is a midcap company in the travel services industry. Recently, MarketsMOJO downgraded its stock call to 'Hold' on October 23, 2024. This decision was based on the company's financial performance and technical trend.
While the company declared very positive results in June 2024 with a growth in operating profit of 37.11%, its technical trend is currently sideways, indicating no clear price momentum. The stock has also generated a negative return of -2.92% since October 23, 2024.

However, Thomas Cook (India) has consistently declared positive results for the last 11 consecutive quarters. Its PAT (HY) has grown at an impressive rate of 100.29% and its ROCE (HY) is the highest at 17.95%. The company also has a high inventory turnover ratio of 180.59 times.

In terms of valuation, the stock is currently trading at a discount compared to its average historical valuations. Its ROE of 12.6 also indicates an attractive valuation with a price to book value of 4.1. Over the past year, the stock has generated a return of 45.76%, while its profits have risen by 206.7%. This gives the company a low PEG ratio of 0.2.

Institutional investors have also shown increasing interest in Thomas Cook (India), with their stake increasing by 1.16% over the previous quarter. They currently hold 13.49% of the company, indicating their confidence in its fundamentals.

However, the company does have some areas of concern. Its high debt to EBITDA ratio of -1.00 times suggests a low ability to service debt. Additionally, its return on equity (avg) is only 3.15%, indicating low profitability per unit of shareholders' funds. Furthermore, its net sales have only grown at an annual rate of 1.89% over the last 5 years, suggesting poor long-term growth.

Overall, while Thomas Cook (India) has shown consistent returns over the last 3 years and has attractive valuations, its technical trend and debt to EBITDA ratio may be cause for concern. Investors may want to hold off on buying or selling the stock until there is more clarity on its financial performance.