Thirumalai Chemicals Receives Upgraded Stock Call from MarketsMOJO, But Concerns Remain

Thirumalai Chemicals, a smallcap company in the chemicals industry, has recently received an upgraded stock call from MarketsMOJO. The stock has been upgraded to 'Hold' on November 29, 2024.
The decision to upgrade the stock to 'Hold' is based on several factors. Firstly, the company has a low Debt to Equity ratio, which is a positive sign for investors. Additionally, the stock is currently in a Bullish range and the technical trend has improved from Mildly Bullish on November 29, 2024. This is supported by multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV.

In terms of performance, Thirumalai Chemicals has been beating the market in the long term as well as the near term. In the last 1 year, the stock has generated a return of 88.72%, outperforming the BSE 500. This trend has also been seen in the last 3 years, 1 year, and 3 months.

However, there are some concerns regarding the company's long term growth. The operating profit has shown a negative growth rate of -12.95% over the last 5 years. Additionally, the company's results for September 2024 were flat. The DEBT-EQUITY RATIO(HY) is at its highest at 1.14 times, while the DPR(Y) is at its lowest at -26.40%. The company also has a low amount of CASH AND CASH EQUIVALENTS(HY) at Rs 415.43 cr.

One of the major risks associated with investing in Thirumalai Chemicals is its negative operating profits. While the stock has generated a high return in the past year, its profits have fallen by -3357%. This makes the stock a risky investment compared to its average historical valuations.

Another factor to consider is the ownership of the company. Despite its size, domestic mutual funds hold only 1.65% of the company. This could indicate that they are not comfortable with the current price or the business of the company. As domestic mutual funds have the capability to conduct in-depth research, their small stake could be a red flag for potential investors.

In conclusion, while Thirumalai Chemicals has shown strong performance in the past year, there are some concerns regarding its long term growth and ownership. Investors should carefully consider these factors before making any investment decisions.