NGL Fine Chem downgraded to 'Hold' by MarketsMOJO, positive results in recent quarters

NGL Fine Chem, a smallcap pharmaceutical company, has recently been downgraded to a 'Hold' by MarketsMOJO on January 18, 2024. This decision was based on the company's low Debt to Equity ratio, which is at an average of 0.02 times.
However, the company has shown positive results in the last two consecutive quarters, with a growth in Net Profit of 124.41%. In addition, its PBT LESS OI(Q) has grown at 85.15% and its OPERATING CF(Y) is at its highest at Rs 35.29 crore. The company also has a strong cash position, with CASH AND CASH EQUIVALENTS(HY) at its highest at Rs 16.90 crore.

Technically, the stock is in a Mildly Bullish range and has shown improvement since December 26, 2023, generating a return of -3.9%. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish trend for the stock.

However, the company's long-term growth has been poor, with an annual growth rate of -1.33% in Operating profit over the last 5 years. Its ROE of 14.4 also indicates a very expensive valuation, with a 5 Price to Book Value. The stock is currently trading at a premium compared to its historical valuations.

Despite its small size, domestic mutual funds hold only 0% of the company, which could signify their discomfort with the stock's price or the business itself. This is despite their capability to conduct in-depth research on companies.

Overall, while NGL Fine Chem has shown positive results in the recent past, its long-term growth and valuation may be a cause for concern for investors. It is important to carefully consider all factors before making any investment decisions.