Jayatma Industries Receives 'Sell' Rating from MarketsMOJO

Jayatma Industries, a microcap textile company, has recently received a 'Sell' rating from MarketsMOJO on October 17, 2023. This downgrade is based on weak long-term fundamental strength, with a -17.46% CAGR growth in net sales over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 8.75 times, indicating a low ability to service debt. The return on equity (avg) of 2.42% also signifies low profitability per unit of shareholders' funds.
In September 2023, the company reported negative results, with the lowest operating cash flow of Rs -4.50 crore and a -20.02% growth in net sales for the first 9 months of the year. The PBT less OI (Q) was also at its lowest at Rs -0.41 crore.

On a positive note, the stock is currently in a bullish range and has shown improvement in its technical trend since November 30, 2023, generating -1.43% returns. The MACD and KST technical factors are also bullish.

With a ROCE of -0.9, the stock is fairly valued with a 0.9 enterprise value to capital employed. It is currently trading at a discount compared to its average historical valuations. However, despite generating a return of 46.51% in the past year, the company's profits have fallen by -9%.

The majority shareholders of Jayatma Industries are non-institutional investors. The company has shown market-beating performance in the long term as well as the near term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months. While the current rating may be a cause for concern, investors should keep an eye on the company's performance in the coming months.