Riddhi Corporate Services Shows Strong Short-Term Growth Amid Mixed Long-Term Fundamentals

Riddhi Corporate Services, operating in the Computers - Software & Consulting industry, has recently undergone an adjustment in its evaluation. This revision reflects a shift in the technical outlook, moving from a sideways trend to a mildly bullish stance.
The company has reported positive financial performance in its latest quarter, with a notable growth in profit after tax (PAT) of 52.48% over the last six months, amounting to Rs 3.69 crore. Additionally, the return on capital employed (ROCE) has reached a high of 13.78%, indicating a favorable financial position. The stock is currently trading at a discount compared to its peers' average historical valuations, which may suggest an attractive entry point for potential investors.

Despite these positive indicators, the long-term fundamentals present a mixed picture. The average ROCE over the long term stands at 6.06%, and the company has experienced a modest annual growth rate of 2.49% in operating profit over the past five years. Furthermore, the high debt to EBITDA ratio of 3.89 times raises concerns regarding the company's ability to service its debt effectively.

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