Oriental Carbon & Chemicals: A Mixed Stock Upgrade Story

Oriental Carbon & Chemicals, a microcap company in the chemicals industry, has received a stock call upgrade from 'Sell' to 'Hold' by MarketsMOJO on December 4, 2023. This upgrade is a result of the company's low Debt to Equity ratio at 0.05 times, indicating a stable financial position.
Technically, the stock is in a Mildly Bullish range and has shown an improvement from Sideways on December 6, 2023, with a return of 1.88% since then. The key technical factor, Relative Strength Index (RSI), has also been Bullish since December 6, 2023.

In terms of valuation, Oriental Carbon & Chemicals has a Very Attractive ROE of 8 and a low Price to Book Value of 1.3. However, the stock is trading at a premium compared to its average historical valuations.

While the company's profits have seen a growth of 19.8% in the past year, the stock has generated a return of -1.89%. This can be attributed to the poor long term growth as the Operating profit has declined at an annual rate of -6.60% in the last 5 years.

In the latest quarter (September 2023), the company's results were flat with the lowest NET SALES (Rs 111.43 cr), PBDIT (Rs 23.55 cr), and PBT LESS OI (Rs 12.94 cr).

Moreover, there has been a decrease in the participation of Institutional Investors in the company, with a -1.04% decrease in their stake over the previous quarter. These investors are known for their ability and resources to analyze fundamentals of companies, making this decrease a cause for concern.

Furthermore, Oriental Carbon & Chemicals has consistently underperformed against the benchmark, BSE 500, in the last 3 years. With a return of -1.89% in the last 1 year, this microcap company has failed to meet the market performance.

Overall, while Oriental Carbon & Chemicals may seem attractive in terms of its low Debt to Equity ratio and high ROE, the company's poor long term growth, flat results, and underperformance against the benchmark raise some red flags. Investors should carefully consider all these factors before making any investment decisions.