Brahmaputra Infrastructure Downgraded to 'Sell' by MarketsMOJO on October 7th, 2024

Brahmaputra Infrastructure, a microcap company in the capital goods industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 7th, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 7.83%, poor long-term growth with only a 0.59% annual growth in Net Sales and 4.33% in Operating Profit over the last 5 years, and a high Debt to EBITDA ratio of 6.98 times, indicating a low ability to service debt.
Additionally, 100% of the company's promoter shares are pledged, which can put downward pressure on stock prices in falling markets. However, the company did declare very positive results in June 2024, with a growth in Net Profit of 94.69% and positive results for the last 5 consecutive quarters. The company also has a high Inventory Turnover Ratio (HY) of 1.26 times and a high Operating Profit to Interest (Q) ratio of 3.49 times, indicating strong financial performance.

On a technical level, the stock's trend is currently sideways, with no clear price momentum. The technical trend has also deteriorated from Mildly Bullish on October 7th, 2024, generating a -4.31% return since then. However, with a ROCE of 11.2, the stock has a very attractive valuation with a 1.1 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations and has generated a return of 46.73% in the past year, with profits rising by 77.7%. The PEG ratio of the company is 0.1, indicating a good value for investors.

Despite the recent downgrade, Brahmaputra Infrastructure has consistently generated positive returns over the last 3 years, outperforming the BSE 500 in each of the last 3 annual periods. However, it is important to note that this article is based on fact-based information and does not include any external data or sources. As always, investors should conduct their own research and analysis before making any investment decisions.