Unichem Laboratories: A Midcap Pharma Company with Strong Financial Performance and Bullish Trend

Unichem Laboratories, a midcap pharmaceutical company, has recently caught the attention of investors with its positive financial performance. MarketsMOJO has upgraded its stock call to 'Buy' on November 11, 2024, citing a growth in operating profit of 50.35% and positive results for the last three consecutive quarters.
The company's operating cash flow has also seen a significant increase, reaching a high of Rs 16.69 crore. In addition, its profit after tax has grown by a whopping 387.8%, making it a promising investment opportunity.

Technically, the stock is in a bullish range and has shown improvement since November 8, 2024, generating a return of -2.27%. Multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV indicate a bullish trend for the stock.

Unichem Laboratories has majority shareholders as promoters, which adds to the confidence of investors. The company has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months, with a market-beating performance in the long term as well as the near term.

However, there are some risks associated with investing in Unichem Laboratories. The company has a high debt to EBITDA ratio of 4.50 times, which may affect its ability to service debt. In addition, its long-term growth has been relatively poor, with net sales growing at an annual rate of 6.92% and operating profit at 15.11% over the last 5 years.

Moreover, the company has reported losses, leading to a negative return on capital employed (ROCE). With a ROE of -0.5, the stock is currently trading at a very expensive valuation with a price to book value of 2.6. It is also trading at a premium compared to its average historical valuations.

Despite these risks, Unichem Laboratories has shown a remarkable performance in the past year, generating a return of 115.26% while its profits have risen by 97.9%. With its positive financial results and bullish trend, the stock is definitely worth considering for investors looking for a midcap pharmaceutical company with potential for growth.