Deccan Cements Downgraded to 'Sell' by MarketsMOJO

Deccan Cements, a microcap company in the cement industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 3, 2023. This decision was based on the company's poor long-term growth, with net sales growing at an annual rate of 4.26% and operating profit at 2.28% over the last 5 years. In addition, the company declared very negative results in September 2023, with a fall in operating profit of -6.47%. This trend has continued for the last 8 consecutive quarters.
The company's operating cash flow has also been low, with the lowest at Rs 54.95 crore. Its profits have also fallen by -28.0% in the last quarter, with a ROCE (Return on Capital Employed) of only 5.95%. This indicates an expensive valuation, with an enterprise value to capital employed ratio of 1.1. Furthermore, the stock is currently trading at a premium compared to its average historical valuations.

Despite being a microcap company, Deccan Cements has not attracted much interest from domestic mutual funds, with only 0.14% of the company's shares held by them. This could be due to their lack of comfort with the current stock price or the company's business. In the last year, the stock has underperformed the market, generating a return of only 0.42% compared to the BSE 500 index's return of 16.72%.

On a positive note, the company has a low debt to equity ratio and its technical indicators, such as MACD and Bollinger Bands, are mildly bullish. However, these factors do not outweigh the overall negative outlook for Deccan Cements. Investors should carefully consider these factors before making any investment decisions.