Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Medico Remedies Ltd indicates a cautious stance for investors. This rating suggests that while the stock exhibits certain strengths, it also faces challenges that temper enthusiasm for immediate buying. Investors are advised to maintain their current holdings without significant additions or disposals, pending further developments. The rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals.
Quality Assessment
As of 12 January 2026, Medico Remedies Ltd demonstrates a good quality grade. The company maintains high management efficiency, reflected in a robust Return on Capital Employed (ROCE) of 15.04%. This figure indicates effective utilisation of capital to generate profits, a positive sign for long-term sustainability. Additionally, the company’s ability to service debt is strong, with a low Debt to EBITDA ratio of 0.89 times, suggesting prudent financial management and limited leverage risk.
Recent operational performance has been encouraging, with positive results declared for the last three consecutive quarters. Notably, the half-year ROCE peaked at 20.65%, and quarterly Profit After Tax (PAT) stood at ₹2.57 crores, growing at an impressive rate of 65.8%. The Debtors Turnover Ratio for the half-year was also high at 2.99 times, indicating efficient collection processes and healthy cash flow management.
Valuation Considerations
The valuation grade for Medico Remedies Ltd is currently assessed as fair. The stock trades at an Enterprise Value to Capital Employed ratio of 5.3, which is modest and suggests the market is valuing the company reasonably relative to its capital base. Compared to its peers, the stock is trading at a discount to average historical valuations, offering some value to investors.
Despite the stock’s negative return of -21.18% over the past year, the company’s profits have risen by 47.8% during the same period. This divergence is reflected in a Price/Earnings to Growth (PEG) ratio of 0.7, which is generally considered attractive, implying that earnings growth is not fully priced into the stock. Such a valuation profile may appeal to investors seeking growth at a reasonable price, though caution is warranted given recent price underperformance.
Financial Trend and Performance
Financially, Medico Remedies Ltd holds a positive grade. The company’s recent earnings growth and operational efficiency underpin this assessment. However, the stock’s market performance has been mixed. As of 12 January 2026, the stock has delivered a 1-day decline of -2.42%, a 1-week drop of -6.60%, and a 1-month fall of -8.62%. Over the last three months, the stock declined by -6.49%, but it has posted a 6-month gain of +15.23%. Year-to-date, the stock is down by -7.36%, and over the past year, it has declined by -24.95%.
Longer-term performance has been below par, with the stock underperforming the BSE500 index over the last three years, one year, and three months. This underperformance, despite improving fundamentals, suggests market scepticism or external factors weighing on the stock price.
Another point of concern is the reducing promoter confidence. Promoters have decreased their stake by -1.21% in the previous quarter, currently holding 61.38% of the company. Such a reduction may signal diminished confidence in the company’s near-term prospects, which investors should monitor closely.
Technical Analysis
From a technical perspective, the stock is graded as mildly bullish. While recent price movements have been negative, the technical indicators suggest some underlying support and potential for recovery. This mild bullishness may reflect short-term buying interest or stabilisation after recent declines, but it does not yet signal a strong upward trend.
Summary for Investors
In summary, Medico Remedies Ltd’s 'Hold' rating reflects a balanced view of its current situation. The company exhibits solid quality metrics and positive financial trends, supported by improving profitability and efficient capital use. Valuation appears fair, with some upside potential given the PEG ratio and discounted trading levels. However, the stock’s recent price underperformance, promoter stake reduction, and only mild technical support temper enthusiasm.
For investors, this rating suggests maintaining existing positions while closely monitoring developments. The stock may offer value for patient investors who believe in the company’s operational turnaround and growth prospects, but caution is advised given the mixed signals from market performance and promoter activity.
Our current Stock of the Month is out! This Large Cap from Automobiles - Passenger Cars emerged as the single best opportunity from our elite universe. Get the details now!
- - Current monthly selection
- - Single best opportunity
- - Elite universe pick
Looking Ahead
Investors should continue to watch Medico Remedies Ltd’s quarterly earnings and operational updates closely. Sustained profit growth and improved market sentiment could provide the impetus for a more favourable rating in the future. Conversely, any further erosion in promoter confidence or disappointing financial results may weigh on the stock’s outlook.
Given the current 'Hold' rating, a prudent approach is recommended, balancing the company’s solid fundamentals against recent price weakness and market uncertainties.
Unlock special upgrade rates for a limited period. Start Saving Now →
