SCI's Stock Upgraded to 'Hold' by MarketsMOJO, Shows Positive Growth in First Half of FY 2024-2025

Shipping Corporation of India (SCI) has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on November 12, 2024. This midcap company in the shipping industry has shown positive results in the first half of the fiscal year 2024-2025, with a growth in PAT (HY) at Rs 582.92 crore and net sales (HY) at Rs 2,965.03 crore. Its ROCE (HY) is also at its highest at 11.03%, indicating a healthy long-term growth.
One of the key factors contributing to the 'Hold' rating is the company's low Debt to Equity ratio (avg) at 0.31 times, which signifies a strong financial position. Additionally, with a ROCE of 9.5, the company has a very attractive valuation with a 1.3 Enterprise value to Capital Employed. This is further supported by the fact that the stock is currently trading at a discount compared to its average historical valuations.

In terms of market performance, SCI has outperformed the market (BSE 500) with a return of 72.82% in the last year, compared to the market's return of 30.30%. With a market cap of Rs 10,590 crore, SCI is the second biggest company in the sector and constitutes 26.96% of the entire sector. Its annual sales of Rs 5,718.25 crore also make up 41.94% of the industry.

However, the company's management efficiency is a cause for concern with a low ROCE of 5.64%. This indicates a low profitability per unit of total capital (equity and debt). Additionally, the stock is currently in a mildly bearish range, as indicated by its MACD and KST technical factors.

Institutional investors have also decreased their stake in SCI by -4% over the previous quarter, holding only 9.26% of the company. This could be a sign of falling participation and lack of confidence in the company's future prospects.

Overall, while SCI has shown positive results and has a strong financial position, its management efficiency and technical factors should be closely monitored. Investors should also take note of the decreasing participation by institutional investors.