Excel Industries downgraded to 'Hold' by MarketsMOJO due to low Debt to Equity ratio

Excel Industries, a smallcap company in the pesticides and agrochemicals industry, has recently been downgraded to a 'Hold' by MarketsMOJO on October 7, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
However, the company has shown positive results in the last quarter, with a growth in net profit of 344.55%. Its net sales and PBDIT have also reached their highest levels at Rs 264.91 crore and Rs 38.96 crore respectively. The operating profit to net sales ratio is also at its highest at 14.71%.

Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. It has outperformed the market (BSE 500) with a return of 73.47% in the last year, compared to the market's return of 33.39%.

However, the company's long-term growth has been poor, with an annual growth rate of -19.80% in operating profit over the last 5 years. Its ROE is also at 1.2, indicating a very expensive valuation with a price to book value of 1.3. The stock is currently trading at a premium compared to its historical valuations.

Despite its size, domestic mutual funds hold only 0.01% of the company, which could suggest that they are not comfortable with the current price or the business. As domestic mutual funds have the capability to conduct in-depth research, this small stake could be a cause for concern for potential investors.