Elantas Beck India Downgraded to 'Sell' by MarketsMOJO Due to Poor Growth and Expensive Valuation

Elantas Beck India, a midcap chemical company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 12, 2024. This decision was based on the company's poor long-term growth, with net sales growing at an annual rate of 11.98% and operating profit at 19.38% over the last 5 years. Additionally, the company has declared negative results in September 2024 after 10 consecutive positive quarters, with PAT(Q) at Rs 31.07 crore falling at -17.5% and PBDIT(Q) at its lowest at Rs 33.15 crore. The operating profit to net sales (Q) is also at its lowest at 18.06%.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a 14 price to book value and a PEG ratio of 4. The stock is currently trading at a premium compared to its average historical valuations. While the stock has generated a return of 66.43% in the past year, its profits have only risen by 17.4%.

On the positive side, Elantas Beck India has a low debt to equity ratio (avg) of 0 times and is technically in a mildly bullish range. The stock's MACD and KST technical factors are also bullish. The majority shareholders of the company are promoters, indicating their confidence in the company's future.

In addition, Elantas Beck India has consistently generated returns over the last 3 years, outperforming BSE 500 in each of the last 3 annual periods. However, considering the recent downgrade and the company's financial performance, investors may want to carefully evaluate their position in the stock.