TVS Supply Chain Solutions receives 'Hold' rating after positive Q2 results

TVS Supply Chain Solutions, a midcap logistics company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending June 2024. The company's operating profit to interest ratio has reached a high of 4.64 times, while its net sales have also seen a significant increase to Rs 2,539.39 crore.
Technically, the stock is currently in a bullish range and has shown improvement since September 4, 2024, with a return of 3.68%. Multiple factors such as MACD, Bollinger Band, KST, and OBV are also indicating a bullish trend for the stock.

However, the company's long-term fundamental strength is weak with a 6.01% CAGR growth in operating profits over the last 5 years. Its ability to service debt is also poor with a low EBIT to interest ratio of 0.92. Additionally, the company has a low return on equity of 3.85%, indicating low profitability per unit of shareholders' funds.

The stock is currently trading at an expensive valuation with a 3.1 enterprise value to capital employed ratio and is higher than its average historical valuations. In the past year, while the stock has generated negative returns of -11.51%, its profits have also fallen by -175%.

Furthermore, institutional investors have decreased their stake in the company by -0.59% in the previous quarter and currently hold only 6.99% of the company. This suggests that these investors, who have better resources and capabilities to analyze company fundamentals, have reduced their interest in the stock.

In comparison to the market (BSE 500), the stock has underperformed in the last year, generating negative returns of -11.51% while the market has seen a return of 33.83%. With these factors in mind, MarketsMOJO has upgraded the stock to a 'Hold' rating.