Accel Receives 'Sell' Rating from MarketsMOJO Due to High Debt and Low Profitability

Accel, a microcap IT hardware company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including the company's high debt to EBITDA ratio of 7.35 times, indicating a low ability to service debt. Additionally, the company's return on equity is only 2.34%, showing low profitability per unit of shareholders' funds.
Technically, the stock is in a Mildly Bearish range and has underperformed the market in the last year, with a return of only 8.24% compared to the market's 27.33%. The stock's MACD and KST technical factors are also Bearish, further supporting the 'Sell' rating.

However, there are some positive factors to consider. The company has shown healthy long-term growth, with net sales growing at an annual rate of 79.28% and operating profit at 43.50%. It has also declared positive results for the last three consecutive quarters, with the highest operating cash flow of Rs 23.45 Cr and higher PAT of Rs 2.98 Cr in the last nine months.

In terms of valuation, Accel has an attractive ROCE of 7.7 and a 1.5 enterprise value to capital employed ratio. The stock is currently trading at a discount compared to its historical valuations. Additionally, while the stock has only generated a return of 8.24% in the last year, its profits have increased by 72.7%, resulting in a low PEG ratio of 0.4.

It is worth noting that the majority shareholders of Accel are the promoters, which may indicate their confidence in the company's future prospects. However, considering the current financial and technical factors, MarketsMOJO has downgraded the stock to 'Sell'. Investors should carefully evaluate these factors before making any investment decisions.