Inox Wind Energy Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and High Debt

Inox Wind Energy, a midcap company in the renewable energy industry, has recently been downgraded to a 'Sell' by MarketsMOJO on April 15, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 0%, poor long-term growth with an annual rate of -11.49% in operating profit over the last 5 years, and a high Debt to EBITDA ratio of -1.00 times, indicating a low ability to service debt.
Additionally, the company's valuation is considered very expensive with a ROCE of -8.2 and an enterprise value to capital employed ratio of 2.7. However, the stock is currently trading at a discount compared to its average historical valuations. While the stock has generated a high return of 480.69% in the past year, its profits have only increased by 60.4%.

Institutional investors have also decreased their stake in the company by -1.55% over the previous quarter, holding only 5.31% collectively. This suggests that these investors, who have better resources and capabilities to analyze company fundamentals, have also lost confidence in Inox Wind Energy.

On a positive note, the company has declared very positive results in December 2023 with a growth in operating profit of 185.32%. It has also consistently declared positive results for the last 3 quarters and has the highest operating profit to interest ratio and PBT less OI ratio. Additionally, its debtors turnover ratio is also the highest in the industry.

Technically, the stock is currently in a mildly bullish range with its MACD and Bollinger Band technical factors also indicating a bullish trend. However, despite its market-beating performance, with a return of 480.69% in the last year, it is important to consider the company's weak fundamentals and high debt before making any investment decisions.