Goa Carbon Receives 'Sell' Rating from MarketsMOJO Due to Poor Long-Term Growth and Negative Results

Goa Carbon, a microcap company in the carbon black industry, has recently received a 'Sell' rating from MarketsMOJO on August 12, 2024. This downgrade is based on the company's poor long-term growth, with an annual operating profit growth rate of only 9.47% over the last 5 years. Additionally, the company has declared negative results for the past two consecutive quarters, with a significant decrease in net sales of -28.39% in June 2024.
One of the main reasons for the 'Sell' rating is the company's low profitability, with a PAT(Q) of only Rs 2.98 crore, a decrease of -86.1% compared to the previous quarter. The company's operating profit to interest ratio is also at its lowest at 1.26 times, indicating potential financial struggles. Furthermore, domestic mutual funds, which have the capability to conduct in-depth research, hold only 0% of the company's shares, suggesting a lack of confidence in the company's performance.

On a positive note, the stock is currently in a mildly bullish range, and its MACD and KST technical factors are also bullish. Additionally, with a ROCE of 39.6, the company has an attractive valuation and a low enterprise value to capital employed ratio of 2.3. However, despite these factors, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 33.94%, but its profits have fallen by -3.8%. This indicates that the stock may not be able to sustain its current performance in the long run. Overall, considering the company's poor long-term growth and recent negative results, it may be wise for investors to approach Goa Carbon with caution and consider the 'Sell' rating given by MarketsMOJO.