Everest Organics Receives 'Sell' Rating Due to Weak Fundamentals and High Debt

Everest Organics, a microcap pharmaceutical company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -14.45% CAGR growth in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 0 times, indicating a low ability to service debt.
In the recent quarter, the company's results were flat, with interest expenses growing at 37.05% and a debt-equity ratio of 1.22 times, the highest in the last 5 years. The PBT less OI (quarterly) was also at its lowest at Rs -0.14 crore.

Furthermore, Everest Organics has underperformed the market in the last 1 year, generating a return of only 22.96%, compared to the market's return of 35.33% (BSE 500). The stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV showing a mildly bullish trend.

Despite these factors, the stock has an attractive valuation with a ROCE of 5 and an enterprise value to capital employed ratio of 1.5. It is also trading at a discount compared to its average historical valuations. However, it is important to note that while the stock has generated a return of 22.96% in the last year, its profits have only risen by 32%, resulting in a PEG ratio of 0.6.

It is worth mentioning that the majority shareholders of Everest Organics are the promoters themselves. This news may be concerning for investors, as it could potentially lead to conflicts of interest. Overall, with the recent downgrade and underperformance in the market, investors may want to carefully consider their investment in Everest Organics.