Medico remedies, a small cap stock which has been trading around the price of Rs. 80 to Rs. 90 gets a Buy rating from Analyst Nikhil Bhatt, who also pointed out a 50% upside in Medico Remedies share in the upcoming months. According to the analyst’s report the suitable buying range is around the current market price with targets of Rs 108 to Rs. 120 and the stop loss is set around Rs 63.
"Medico Remedies Ltd." is a trusted pharmaceutical drug manufacturer, supplier, and exporter founded in 1994. The WHO-GMP- and ISO 9001-2015-certified company serves high-end clientele globally. The pharmaceutical variety is hygienically produced, beautifully packed, and delivered on time. General Formulations and Beta-Lactam Formulations have their own approved manufacturing plants located in Palghar, India.
The company has always been profitable since the year 2014 and has shown a very consistent growth in its overall sales. The stock price of medico remedies has shown an outstanding 400% compound annual growth rate with room for further growth after the recent stock split. The company has been able to generate Net Cash i.e Improving Net Cash Flow for last 2 years along with Annual Net Profits improving on the other side. The company has been Effectively using Shareholders funds for its business related activities which states that the Return on equity (ROE) has also been improving since the last 2 years.
Analyst Nikhil Bhatt has recommended to buy this stock close to its current market price and hold it for a short term for a target of Rs.120 along with a stop-loss of Rs.63. The recommendation was made since the stock has shown a Positive Breakout near the First Resistance and RSI indicating price strength which is suitable for buying. Although the stock might be a little over valued than its peers, Medico’s Annual Net Profit rose 88.7% in the last year to Rs 4.9 Crores. Its sector's average net profit growth for the last fiscal year was -7.9% which clearly justifies its higher valuation. Medico Remedies had held its price even when the whole medical sector was bearish.
The company promoters own a huge chunk of 73.34% in the company and they have not pledged any shares for the company’s short term borrowing because Interest Coverage Ratio is 11.7, higher than 1.5. This means that it is able to meet its interest payments comfortably with its earnings.
Medico Remedies has been supplying its products in more than 35 countries for the past 7 years and it has established a huge recurring customer base in the international markets. With state of the art manufacturing plants and latest R&D facilities the company has been able to churn out a revenue of $17 Million in the trailing twelve months.
The analyst’s report concluded on a note that this share is suitable for a mid to long term investment if one starts accumulating close to the current market price. The targets are expected to be around Rs.120 and the stop-loss is set to be of Rs.63. The report was generated based on the fundamentals as well as the technicals of the company which made the share immune to the bearish market, since the share held its price without plunging like its peers did. Moreover the pharma sector has shown a decent recovery in past 5 trading sessions which will add more momentum to Medico Remedies in the upward direction.
Link to the report- https://nikhilbhatt.in/wp-content/uploads/2023/04/Medico-Remedies-Ltd.pdf
Moneycontrol Journalists were not involved in the creation of the article.
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