Agarwal Industrial Corporation Downgraded to 'Sell' by MarketsMOJO on Negative Results

Agarwal Industrial Corporation, a smallcap company in the petrochemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 18, 2024. This decision was based on negative results in September 2024, with a significant decrease in net sales and profits. The company's interest has grown at a high rate of 84.82%, but its net sales have fallen by -40.9% and its profits by -44.8%.
Technically, the stock is in a mildly bearish range and has generated -2.32% returns since the downgrade. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bearish trend for the stock. Additionally, institutional investors have decreased their stake in the company, holding only 5.89% collectively. This suggests that they have better resources and capabilities to analyze the company's fundamentals compared to retail investors.

In the last year, Agarwal Industrial Corporation has underperformed the market, generating a return of only 3.93% compared to the market's 23.90%. However, the company has a strong ability to service debt with a low Debt to EBITDA ratio of 1.25 times. It also has a healthy long-term growth rate, with net sales growing at an annual rate of 28.55% and operating profit at 40.77%.

The company also has a very attractive valuation with a ROCE of 21.1 and an enterprise value to capital employed ratio of 2.2. It is currently trading at a discount compared to its historical valuations. Despite its low market performance, the company's profits have risen by 26.8% in the past year, resulting in a PEG ratio of 0.5.

With a market cap of Rs 1,503 crore, Agarwal Industrial Corporation is the biggest company in the petrochemicals sector, constituting 23.94% of the entire industry. Its annual sales of Rs 2,297.99 crore also make up 31.96% of the industry. While the company may have faced some challenges in the recent past, it still has strong fundamentals and a promising future in the petrochemicals industry.