Aries Agro downgraded to 'Hold' by MarketsMOJO, despite recent positive results and bullish trend

Aries Agro, a microcap company in the fertilizer industry, has recently been downgraded to a 'Hold' by MarketsMOJO on January 30, 2024. This decision was based on various factors, including the company's recent positive results in September 2023, where its PAT(Q) grew by an impressive 236.2%. Additionally, Aries Agro's ROCE(HY) has reached its highest at 15.49%, while its DEBT-EQUITY RATIO(HY) is at its lowest at 0.21 times.
Technically, the stock is currently in a Bullish range and has shown improvement since November 17, 2023, generating a return of 20.07%. Multiple factors, such as MACD, Bollinger Band, KST, and OBV, also indicate a bullish trend for the stock.

With a ROCE of 15.8, Aries Agro is currently fairly valued with a 1.2 Enterprise value to Capital Employed. However, it is trading at a discount compared to its average historical valuations. Despite generating a return of 27.58% in the past year, the company's profits have fallen by -26.6%.

The majority shareholders of Aries Agro are its promoters, indicating their confidence in the company. However, the company's ability to service its debt is weak, with a poor EBIT to Interest (avg) ratio of 1.81. Additionally, its Return on Equity (avg) stands at 6.35%, signifying low profitability per unit of shareholders' funds.

In terms of long-term growth, Aries Agro has shown a slow growth rate, with Net Sales growing at an annual rate of 11.30% and Operating profit at 2.00% over the last 5 years. Overall, while Aries Agro may have potential, it is currently recommended to hold onto the stock and monitor its performance in the future.