D&H India Downgraded to 'Sell' by MarketsMOJO

D & H India, a microcap company in the electrodes and welding industry, has recently been downgraded to a 'Sell' by MarketsMOJO on December 18, 2023. This decision was based on weak long-term fundamental strength, with an average return on capital employed (ROCE) of 5.82%. The company's ability to service its debt is also a concern, with a poor EBIT to interest ratio of 1.68.
In addition, the company's financial results for September 2023 were flat, with a decline of -47.92% in profits and the lowest EPS of Rs 0.65. However, there are some positive technical factors to consider, as the stock is currently in a mildly bullish range and both the MACD and KST indicators are bullish.

Despite these technical factors, the stock's valuation is still attractive with an ROCE of 11.1 and an enterprise value to capital employed ratio of 1.4. It is also trading at a discount compared to its historical valuations. However, investors should note that while the stock has generated a return of 23.27% in the past year, its profits have fallen by -21%.

The majority shareholders of D & H India are the promoters, and the company has consistently generated returns over the last 3 years. In fact, it has outperformed the BSE 500 index in each of the last 3 annual periods. While the stock may have some positive aspects, the recent downgrade by MarketsMOJO suggests caution for potential investors.