Aarey Drugs & Pharmaceuticals Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Technical Trend

Aarey Drugs & Pharmaceuticals, a microcap company in the trading industry, has recently received a 'Sell' rating from MarketsMOJO on April 23, 2024. This downgrade is due to the company's weak long-term fundamental strength, with a -38.02% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low profitability per unit of shareholders' funds, with a return on equity of only 6.74%.
Technically, the stock is currently in a mildly bearish range, with a deteriorating trend since April 23, 2024, and a bearish KST (Know Sure Thing) factor. However, the company did show positive results in December 2023 after 7 consecutive negative quarters. Its net sales have grown at 22.43%, with the highest PBDIT (Profit Before Depreciation, Interest, and Taxes) of Rs 2.71 crore and the highest operating profit to net sales ratio of 3.54%.

In terms of valuation, Aarey Drugs & Pharmaceuticals has an attractive ROCE (Return on Capital Employed) of 2.3 and a 1 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 70.92%, while its profits have risen by 59.3%. The PEG (Price/Earnings to Growth) ratio of the company is 0.5, indicating a potential undervaluation.

The majority shareholders of Aarey Drugs & Pharmaceuticals are the promoters, which can be seen as a positive sign for investors. The stock has also outperformed the market (BSE 500) with a return of 70.92% in the last year, compared to the market's 38.02% return. While the company has shown some positive results, the overall weak fundamental strength and technical trend suggest a 'Sell' rating for Aarey Drugs & Pharmaceuticals.