Bhagwati Autocast Receives 'Sell' Rating, Underperforms Market with Negative Returns

Bhagwati Autocast, a microcap company in the castings/forgings industry, has recently received a 'Sell' rating from MarketsMOJO on October 1, 2024. This downgrade is due to the stock being in a Mildly Bearish range and its technical trend deteriorating from Mildly Bullish on October 1, 2024. Since then, the stock has generated a negative return of -3.17%. Additionally, the MACD and KST technical factors are also Mildly Bearish.
In the past year, while the market (BSE 500) has generated a return of 39.61%, Bhagwati Autocast has significantly underperformed with a negative return of -13.69%. However, the company has a strong ability to service debt with a low Debt to EBITDA ratio of 1.45 times. It also has a healthy long-term growth rate, with an annual operating profit growth rate of 40.35%.

In the latest results for June 2024, the company's PAT (HY) has increased to Rs 6.56 crore. With a ROCE of 26.1, the company has an attractive valuation with a 3.3 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. However, despite this, the company's profits have fallen by -1.3% in the past year.

It is worth noting that the majority shareholders of Bhagwati Autocast are the promoters themselves. This may indicate a lack of interest from external investors. Overall, while the company may have some positive factors, the recent downgrade and underperformance in the market suggest caution for potential investors.