TVS Supply Chain Solutions downgraded to 'Sell' due to weak fundamentals and underperformance.

TVS Supply Chain Solutions, a midcap logistics company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on the company's weak long-term fundamental strength, poor ability to service its debt, and low profitability per unit of shareholders' funds.
Over the past 5 years, the company has only seen a 6.01% CAGR growth in operating profits, which is significantly lower than the industry average. Additionally, its EBIT to Interest ratio of 0.92 indicates a weak ability to service its debt. The company's Return on Equity (avg) of 3.85% also suggests low profitability.

Furthermore, TVS Supply Chain Solutions has an expensive valuation with a 3 Enterprise value to Capital Employed and a ROCE of 3.5. In the past year, while the stock has generated negative returns of -8.12%, its profits have also fallen by -175%.

Institutional investors have also decreased their stake in the company, holding only 6.99% collectively. This is a cause for concern as these investors have better resources to analyze company fundamentals.

Moreover, TVS Supply Chain Solutions has underperformed the market in the last year, generating negative returns while the market has seen a 36.68% increase. However, the company did show positive results in June 2024, with its operating profit to interest ratio at its highest and a significant growth in net sales.

From a technical standpoint, the stock is currently in a mildly bullish range with its MACD and KST technical factors also showing a bullish trend. However, considering the company's weak fundamentals and underperformance in the market, MarketsMOJO has downgraded its stock call to 'Sell'.