Bhaskar Agrochemicals Downgraded to 'Sell' by MarketsMOJO on Weak Fundamentals and Performance

Bhaskar Agrochemicals, a microcap company in the pesticides and agrochemical industry, has recently been downgraded to a 'Sell' by MarketsMOJO on May 8, 2024. This decision was based on several factors, including weak long-term fundamental strength, low ability to service debt, and below par performance in both the long and near term.
One of the main reasons for the downgrade is the company's weak long-term fundamental strength, with a 5.52% CAGR growth in net sales over the last 5 years. Additionally, Bhaskar Agrochemicals has a high debt to EBITDA ratio of 0 times, indicating a low ability to service debt. The company has also only been able to generate a return on equity of 8.10%, which is considered low profitability per unit of shareholders' funds.

In terms of performance, the stock has generated -15.80% returns in the last year and has underperformed the BSE 500 index in the last 3 years, 1 year, and 3 months. However, the company did declare very positive results in December 2023, with a growth in net sales of 20.06%. It has also declared positive results for the last 2 consecutive quarters, with PBT LESS OI(Q) growing at 381.8% and NET SALES(HY) growing at 24.26%.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since May 8, 2024, generating -4.32% returns since then.

On a positive note, Bhaskar Agrochemicals has an attractive valuation with a ROCE of 11.9 and a 1.6 enterprise value to capital employed. The stock is also trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of -15.80%, its profits have risen by 76%, resulting in a PEG ratio of 0.2.

It is worth noting that the majority shareholders of Bhaskar Agrochemicals are the promoters of the company. Overall, with the recent downgrade to 'Sell' and the various factors affecting the company's performance, investors may want to carefully consider their position in Bhaskar Agrochemicals.