North Eastern Carrying Corporation Receives 'Hold' Rating After Positive Q1 Results

North Eastern Carrying Corporation, a microcap logistics company, has recently received a 'Hold' rating from MarketsMOJO on July 16, 2024. This upgrade comes after the company reported positive results in the first quarter of 2024, with its net sales reaching a record high of Rs 91.84 crore and its profits at Rs 2.86 crore. The earnings per share also saw a significant increase, reaching Rs 0.30.
Technically, the stock is currently in a Mildly Bullish range, with its trend improving from Sideways on July 16, 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV are all indicating a bullish sentiment for the stock.

With a ROCE of 6.4, the company's valuation is considered attractive, with an enterprise value to capital employed ratio of 1.4. The stock is also trading at a fair value compared to its average historical valuations. In the past year, the stock has outperformed the market (BSE 500) with a return of 63.93%, while its profits have increased by 39.2%.

The majority shareholders of North Eastern Carrying Corporation are its promoters, indicating their confidence in the company's performance. However, the company's long-term fundamental strength is weak, with a negative CAGR growth of -0.46% in net sales over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 5.93 times, indicating a low ability to service its debt. The return on equity (average) is also low at 4.68%, indicating a low profitability per unit of shareholders' funds.

Overall, while the recent results and technical indicators show a positive outlook for North Eastern Carrying Corporation, its weak long-term fundamentals and high debt levels may be a cause for concern for potential investors. It is advisable to closely monitor the company's performance before making any investment decisions.