Aarti Industries downgraded to 'Sell' by MarketsMOJO due to poor long-term growth and expensive valuation

Aarti Industries, a largecap chemical company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of -2.01% over the last 5 years. Additionally, the stock is currently in a Mildly Bearish range, with multiple bearish indicators such as MACD, Bollinger Band, and KST.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a ROCE of 7.1 and an enterprise value to capital employed ratio of 2.9. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 15.18%, but its profits have only risen by 0.9%, resulting in a high PEG ratio of 43.1.

Furthermore, Aarti Industries has underperformed the market in the last year, with a return of 15.18% compared to the market's (BSE 500) return of 40.49%. However, the company has shown high management efficiency with a ROCE of 17.22%.

In more positive news, Aarti Industries reported its highest net sales of Rs 1,855.00 crore and PBDIT of Rs 305.00 crore in the quarter ending June 2024. Its PBT less OI was also at its highest at Rs 139.00 crore during this period.

Overall, while Aarti Industries has shown positive results in the recent quarter, its long-term growth and current stock performance have led to a 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any decisions regarding this largecap chemical company.