Paramount Cosmetics (India) Receives 'Hold' Rating from MarketsMOJO, Technical Trend Improves to Bullish

Paramount Cosmetics (India), a microcap company in the FMCG industry, has recently received a 'Hold' rating from MarketsMOJO on February 8, 2024. This upgrade is based on the stock's technical trend, which has improved from Mildly Bullish to Bullish. Additionally, multiple factors such as MACD, Bollinger Band, and OBV also indicate a bullish outlook for the stock.
One of the key reasons for the 'Hold' rating is the company's attractive valuation, with a ROCE of 5 and an Enterprise value to Capital Employed ratio of 1.1. The stock is currently trading at a discount compared to its average historical valuations. Furthermore, in the past year, the stock has generated a return of 21.02%, while its profits have increased by 122%. This results in a low PEG ratio of 0.2, indicating potential for future growth.

However, Paramount Cosmetics (India) also has some weak fundamental strengths. The company has a high Debt to EBITDA ratio of 4.16 times, indicating a low ability to service debt. Additionally, the company has a low Return on Equity (avg) of 1.34%, indicating low profitability per unit of shareholders' funds.

In terms of recent financial performance, the company reported flat results in September 2023, with PBDIT(Q) at Rs -0.37 cr. and PBT LESS OI(Q) at Rs -0.99 cr. However, the non-operating income for the quarter was 496.00% of the Profit Before Tax (PBT).

In the last year, Paramount Cosmetics (India) has underperformed the market, with a return of 21.02% compared to the market (BSE 500) returns of 32.13%. This could be a cause for concern for investors.

Overall, while the technical trend and attractive valuation make Paramount Cosmetics (India) a 'Hold' for now, investors should keep an eye on the company's weak fundamental strengths and underperformance in the market.