Orient Beverages Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results in Recent Quarter

Orient Beverages, a microcap FMCG company, has recently received a 'Hold' rating from MarketsMOJO on June 18, 2024. This upgrade is based on the company's positive results in the quarter ending March 2024, with the highest net sales of Rs 39.46 crore, highest PAT of Rs 2.68 crore, and highest EPS of Rs 12.35.
The stock is currently in a bullish range and the technical trend has improved from mildly bullish to bullish on June 18, 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV are also indicating a bullish trend for the stock.

The majority shareholders of Orient Beverages are the promoters, which can be seen as a positive sign for the company. Additionally, the stock has consistently outperformed BSE 500 in the last 3 annual periods, with a return of 189.19% in the last year.

However, the company has a high debt and weak long-term fundamental strength. Its operating profit has declined at an annual rate of -10.20% over the last 5 years, and its debt to equity ratio is at 2.53 times. This indicates a poor long-term growth potential and low profitability per unit of shareholders' funds.

Moreover, with a ROCE of 0.7, the stock is currently very expensive with an enterprise value to capital employed ratio of 1.8. However, it is currently trading at a discount compared to its average historical valuations.

In the past year, while the stock has generated a high return of 189.19%, its profits have declined by -97.9%. This could be a cause for concern for potential investors.

Overall, Orient Beverages has shown positive results in the recent quarter and has a bullish trend in the stock market. However, its high debt and weak long-term growth potential may be a cause for caution for investors.