Deep Polymers Receives 'Sell' Rating from MarketsMOJO, Negative Performance Raises Concerns

Deep Polymers, a microcap company in the chemicals industry, has recently received a 'Sell' rating from MarketsMOJO on September 10, 2024. This downgrade is based on the company's negative performance in the June 2024 quarter, with a significant increase in interest expenses and a decrease in profits. The company's return on capital employed (ROCE) is also at its lowest at 9.15%, indicating a below par performance in both the long term and near term.
In addition to underperforming the BSE 500 index in the last 3 years, 1 year, and 3 months, the stock has also generated a negative return of -7.01% in the last year. This is a cause for concern for investors, as the company's technical trend is currently sideways with no clear price momentum. The stock's technical trend has also deteriorated since September 10, 2024, generating a return of -1.12%.

However, there are some positive factors to consider. Deep Polymers has shown healthy long term growth, with an annual growth rate of 36.74% in net sales and 162.68% in operating profit. Additionally, the stock is currently trading at an attractive valuation with a ROCE of 7.8 and an enterprise value to capital employed ratio of 2.1. This is a discount compared to its average historical valuations.

It is worth noting that the majority shareholders of Deep Polymers are the promoters themselves. This may indicate their confidence in the company's long term growth potential. However, based on the recent downgrade and the company's negative performance, it may be wise for investors to approach this stock with caution.