Filatex India Downgraded to 'Sell' by MarketsMOJO, Poor Long-Term Growth and Negative Results

Filatex India, a smallcap company in the textile industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 26, 2024. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of only 5.37% over the last 5 years.
In addition, the company has recently declared negative results in September 2024, after 3 consecutive positive quarters. The PAT(Q) has fallen by -57.0% at Rs 13.47 crore, while the OPERATING CF(Y) and PBDIT(Q) have also hit their lowest levels at Rs 167.87 crore and Rs 41.48 crore, respectively.

Despite being a smallcap company, Filatex India has not attracted much interest from domestic mutual funds, with only 0% of the company's shares being held by them. This could be a sign that they are not comfortable with the company's current price or its business.

On a positive note, the stock is currently in a Mildly Bullish range and has multiple bullish indicators such as MACD, Bollinger Band, KST, and OBV. However, with a ROCE of 12.4, the stock is fairly valued with an enterprise value to capital employed ratio of 2.2. It is also trading at a discount compared to its average historical valuations.

In the past year, Filatex India's stock has generated a return of 26.08%, while its profits have risen by 86.4%. This gives the company a PEG ratio of 0.3, indicating that it may be undervalued. However, considering the recent downgrade and the company's poor long-term growth, it may be wise for investors to approach this stock with caution.