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

North Eastern Carrying Corporation, a microcap logistics company, has recently received a 'Hold' rating from MarketsMOJO on July 4th, 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 mildly bearish on July 4th, 2024. This can be attributed to multiple bullish factors such as Bollinger Band, KST, and OBV. Additionally, with a ROCE of 6.4, the stock is considered to have an attractive valuation with a 1.3 enterprise value to capital employed.

In the past year, North Eastern Carrying Corporation has generated a return of 54.71%, outperforming the BSE 500. However, its long-term fundamental strength is weak, with a -0.46% CAGR growth in net sales over the last 5 years. The company also has a high debt to EBITDA ratio of 5.93 times, indicating a low ability to service debt. Furthermore, its return on equity (average) stands at 4.68%, signifying low profitability per unit of shareholders' funds.

The majority shareholders of North Eastern Carrying Corporation are its promoters, and the company has a history of market-beating performance in both the long and near term. This is evident from its 54.71% return in the last year and its outperformance of BSE 500 in the last 3 years, 1 year, and 3 months.

Overall, while North Eastern Carrying Corporation has shown positive results in the first quarter of 2024 and has a bullish technical trend, its long-term fundamental strength and profitability may be a cause for concern. Investors are advised to hold their positions and monitor the company's performance closely.