Bhakti Gems & Jewellery Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Declining Profits

Bhakti Gems & Jewellery, a microcap company in the jewellery industry, has recently received a 'Sell' rating from MarketsMOJO on February 5th, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 3.52%. Additionally, Bhakti Gems & Jewellery has a high Debt to EBITDA ratio of 9.56 times, indicating a low ability to service debt.
In the latest quarter, the company's net sales have fallen by -22.73% to Rs 30.63 crore, with the lowest EPS of Rs 0.07. These flat results in December 2023 are a cause for concern for investors.

On a positive note, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish. With an ROCE of 4.5, the stock has an attractive valuation with a 1.5 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

However, over the past year, while the stock has generated a return of 36.29%, its profits have fallen by -13%. This could be a red flag for potential investors.

It is worth noting that the majority of shareholders in Bhakti Gems & Jewellery are non-institutional investors. This could potentially lead to higher volatility in the stock price.

In conclusion, while Bhakti Gems & Jewellery may seem attractive with its discounted valuation and bullish technical factors, the company's weak fundamental strength and recent decline in profits should be taken into consideration before making any investment decisions.