Themis Medicare Receives 'Hold' Rating Upgrade

Themis Medicare, a smallcap pharmaceutical company, has recently received a 'Hold' rating from MarketsMOJO on 2023-12-26. This upgrade is based on various technical indicators such as MACD, Bollinger Band, KST, and DOW, which all point towards a bullish trend for the stock. Since the upgrade on 20-Dec-23, the stock has generated a return of 27.97%.
In addition to the recent positive trend, Themis Medicare has also shown consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. However, the company's high Debt to EBITDA ratio of 7.47 times raises concerns about its ability to service debt. Moreover, its net sales have only grown at an annual rate of 12.87% over the last 5 years, indicating poor long-term growth.

The company also reported negative results in Sep'2023 after 1 consecutive positive quarters, with its operating cash flow at its lowest at Rs 16.09 Cr and PBT LESS OI(Q) at Rs 11.52 cr, falling by -25.0%. Its PAT(Q) at Rs 11.32 cr has also fallen by -21.5%. With a ROCE of 11.1, the stock is currently trading at a very expensive valuation with a 4.8 Enterprise value to Capital Employed.

Despite its recent positive performance, the stock is currently trading at a discount compared to its average historical valuations. This could be a sign that the market is not fully convinced about the company's future potential. Additionally, domestic mutual funds, which have the capability to conduct in-depth research, hold only 0% of the company's shares. This could indicate that they are either not comfortable with the current price or the business itself.

In conclusion, while Themis Medicare has shown some positive trends in the short term, its high debt and poor long-term growth raise concerns about its future prospects. Investors should carefully consider these factors before making any investment decisions.