Oriental Aromatics: A Smallcap Company with Strong Financials and Positive Results, Upgraded to 'Buy' by MarketsMOJO

Oriental Aromatics, a smallcap company in the chemicals industry, has recently caught the attention of investors. MarketsMOJO has upgraded their stock call on Oriental Aromatics to 'Buy' on November 12, 2024.
One of the main reasons for this upgrade is the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.48 times. This is a positive sign for investors as it shows the company's financial stability.

In addition, Oriental Aromatics has declared very positive results for the last two consecutive quarters, with a growth in Operating Profit of 1497.32%. The company's OPERATING CF(Y) is also at its highest at Rs 141.80 Cr, while PBDIT(Q) and OPERATING PROFIT TO NET SALES(Q) are also at their highest levels.

From a technical standpoint, the stock is currently in a bullish range and the technical trend has improved from mildly bullish to bullish on November 12, 2024. This is supported by multiple factors such as MACD, KST, and OBV.

Oriental Aromatics has also outperformed the market (BSE 500) with a return of 49.17% in the last year, compared to the market's return of 27.99%. This shows the company's market-beating performance.

However, there are some risks to consider when investing in Oriental Aromatics. The company has shown poor long-term growth, with an annual growth rate of -14.73% in Operating Profit over the last 5 years. Additionally, with a ROCE of 3.3, the company's valuation is considered expensive with a 2.4 Enterprise value to Capital Employed.

It is also worth noting that despite the company's size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the current price or the business itself. However, it is important to keep in mind that domestic mutual funds have the capability to conduct in-depth research on companies, so their small stake may not necessarily be a negative sign.

Overall, Oriental Aromatics has shown strong financial stability and positive results in recent quarters, making it a potential 'Buy' for investors. However, it is important to consider the risks and do thorough research before making any investment decisions.