Orient Ceratech Receives 'Buy' Rating, Shows Strong Financials

Orient Ceratech, a microcap company in the abrasives industry, has recently received a 'Buy' rating from MarketsMOJO on August 3rd, 2023. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.38 times.
In addition, the company has shown positive results in September 2023, with its highest operating cash flow of Rs 41.48 crore and highest return on capital employed (ROCE) of 8.28%. Its profits have also grown by 56.8% to Rs 5.25 crore in the last quarter.

Technically, the stock is in a bullish range and has generated 34.8% returns since October 12th, 2023. The MACD and KST technical factors are also bullish, indicating a positive trend for the stock.

With a ROE of 6.2, Orient Ceratech has a very attractive valuation with a price to book value of 2.4. However, it is currently trading at a premium compared to its historical valuations. Despite this, the stock has generated a return of 81.69% in the last year, with profits rising by 69.7%. The PEG ratio of the company is also at a low 0.6.

In the long term, Orient Ceratech has outperformed the BSE 500 index, with a market-beating performance. However, there are some risks to consider, such as poor long term growth with a negative annual growth rate of -2.03% in net sales and -9.03% in operating profit over the last 5 years.

Another risk is the low stake of domestic mutual funds in the company, despite its small size. This may indicate that they are not comfortable with the current price or the business. However, with its strong financials and positive technical indicators, Orient Ceratech seems to be a promising investment opportunity in the abrasives industry.