IFB Agro Industries Receives 'Hold' Rating, But Poor Growth and Negative EBITDA Raise Concerns

IFB Agro Industries, a microcap company in the breweries industry, has recently received a 'Hold' rating from MarketsMOJO on August 14, 2024. This upgrade is based on the company's low Debt to Equity ratio, which is currently at 0 times. Additionally, the stock is technically in a Mildly Bullish range, with its MACD and KST technical factors also showing a Bullish trend.
However, the company has shown poor long-term growth, with its Net Sales growing at an annual rate of -0.28% and Operating profit at -203.93% over the last 5 years. In the latest quarter, the company's Operating Cash Flow was at its lowest at Rs -31.60 Cr, while its Profit After Tax has grown at a negative rate of -54.31%. The company's Return on Capital Employed (ROCE) is also at its lowest at -2.37%, indicating a lack of profitability.

One of the major concerns for investors is the company's negative EBITDA, which makes it a risky investment. The stock is currently trading at a higher risk compared to its average historical valuations. In the past year, while the stock has generated a return of 2.78%, its profits have fallen by -116.5%.

Another factor to consider is the low stake held by domestic mutual funds in the company, which is only 0.02%. This could indicate that these funds are not comfortable with the company's current price or its business. Furthermore, the stock has underperformed the market in the last 1 year, with a return of only 2.78%, while the market (BSE 500) has generated a return of 34.16%.

In conclusion, while IFB Agro Industries may have some positive indicators, such as a low Debt to Equity ratio and a Bullish technical trend, its poor long-term growth and negative EBITDA make it a risky investment. The low stake held by domestic mutual funds and underperformance in the market also raise concerns for potential investors. It is advisable to carefully consider all factors before making any investment decisions regarding this microcap company in the breweries industry.