FSN E-Commerce Ventures downgraded to 'Hold' by MarketsMOJO due to recent financial performance

FSN E-Commerce Ventures, a largecap FMCG company, has recently been downgraded to a 'Hold' by MarketsMOJO on July 1, 2024. This decision was based on the company's recent financial performance and technical indicators.
While FSN E-Commerce Ventures has shown healthy long-term growth with an annual net sales growth rate of 37.79% and operating profit growth rate of 56.64%, its operating profit growth rate has slowed down to 15.32% in the last quarter. However, the company has declared positive results for the last two consecutive quarters, with PBT LESS OI(Q) growing at 96.2% and NET SALES(HY) growing at 25.04%.

Technically, the stock is currently in a mildly bullish range and the key technical factor, KST, has been bullish since July 1, 2024. The company also has a high institutional holding of 27.48%, indicating that these investors have better resources to analyze the company's fundamentals.

However, FSN E-Commerce Ventures' ability to service its debt is weak with a poor EBIT to Interest (avg) ratio of 1.83. Additionally, the company's return on equity (avg) is low at 2.23%, indicating low profitability per unit of shareholders' funds. Its ROCE of 6.1 also suggests an expensive valuation with a 25.7 enterprise value to capital employed.

Despite the company's profits rising by 67.6% in the past year, the stock has underperformed the market with a return of only 18.80%. This is significantly lower than the market (BSE 500) returns of 37.64%. Overall, while FSN E-Commerce Ventures has shown potential for growth, its current financial performance and valuation suggest a 'Hold' recommendation from MarketsMOJO.