Ansal Housing Receives 'Sell' Rating from MarketsMOJO Due to High Debt and Weak Fundamentals

Ansal Housing, a microcap real estate company, has recently received a 'Sell' rating from MarketsMOJO on February 28, 2024. This downgrade is due to the company's high debt and weak long-term fundamental strength. Over the past 5 years, the company's operating profit has declined at an annual rate of -7.39%. Additionally, Ansal Housing has a high debt to equity ratio of 2.46 times and a low return on equity of 0.01%, indicating low profitability per unit of shareholders' funds.
In the latest quarter, the company's results have been flat with a significant decrease in profit after tax at -160.2%. Its cash and cash equivalents are also at a low of Rs 11.82 crore. Furthermore, non-operating income accounts for 123.42% of the profit before tax, which raises concerns about the company's core operations.

On a positive note, Ansal Housing's stock is currently in a mildly bullish range, and its MACD and KST technical factors are also bullish. With a ROCE of 8.7, the stock is considered to have a very attractive valuation with an enterprise value to capital employed ratio of 1. The stock is also trading at a discount compared to its average historical valuations. However, despite generating a return of 289.04% in the past year, the company's profits have declined by -19.3%.

The majority of Ansal Housing's shareholders are non-institutional investors. However, the company has shown market-beating performance in the long term as well as the near term. In the last year, it has outperformed the BSE 500 index, and in the last 3 years, 1 year, and 3 months, it has generated returns higher than the market average.

Overall, while Ansal Housing's stock may have shown strong performance in the past, its high debt and weak fundamental strength make it a risky investment option. Investors should carefully consider these factors before making any decisions.