Analyst Nikhil Bhatt says that Medico Remedies Ltd., which makes, sells, and exports pharmaceutical drugs, is a short-term buy. The company has been around since 1994. It is certified by WHO-GMP and ISO 9001-2015, and it has clean production facilities in Palghar, India. Since 2014, Medico Remedies has been making money, and its overall sales have been going up every year.
After the split, the stock stayed between Rs.70 and Rs.80, but it recently made a new 52-Week High, which shows that it has broken out.
The stock price of the company has grown by an impressive 400% each year, and after a recent stock split, it has room to grow even more. Over the last two years, Medico Remedies has done a good job of using shareholder money for business activities. This has led to an increasing return on equity (ROE).
Bhatt says to buy the stock at its current market price and hold it for the short term, with a target price of Rs. 120 and a stop-loss price of Rs. 63. The stock broke out in a good way near the first resistance, and its relative strength index (RSI) shows that the price is strong, so it’s a good choice to buy. Even though the stock may be overpriced compared to its competitors, Medico Remedies’ net profit rose 88.7% to Rs. 4.9 crores in the last year. The average net profit growth for its sector in the last fiscal year was -7.9%, which is why it is worth more.
Thanks to its state-of-the-art manufacturing plants and R&D facilities, Medico Remedies has a large number of repeat customers in more than 35 countries around the world. In the last twelve months, the company made $17 million in sales.
The founders of the company own a big chunk of it (73.34%), and they haven’t put up any shares as collateral for short-term loans. The company has an interest coverage ratio of 11.70, which means that its earnings are more than enough to cover its interest payments.
Overall, the analyst’s report says that Medico Remedies is a good investment for the medium to long term for people who are just starting to save money near the current market price. The company’s fundamentals and technicals have made its stock immune to the bearish market, so its price has stayed the same and it hasn’t dropped like its peers. Also, the pharma sector has been doing better in the last five trading days, which gives Medico Remedies more momentum in the right direction.
Disclaimer: The opinions and suggestions above are not those of Mint, but of individual analysts or brokerage firms. Before making any investment decisions, we tell people to check with certified experts.
Source: Team CurrencyVeda