Jubilant Industries Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Weak Fundamentals

Jubilant Industries, a smallcap company in the pesticides and agrochemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 21, 2024. This decision was based on the company's high debt and weak long-term fundamental strength.
With a debt to equity ratio of 0 times, Jubilant Industries has a high level of debt, which can be a cause for concern for investors. Additionally, the company's return on capital employed (ROCE) is at 9.75%, indicating low profitability per unit of total capital.

Furthermore, the stock is currently trading at a discount compared to its historical valuations, with an expensive valuation of 7.1 enterprise value to capital employed. Despite generating a return of 187.10% in the past year, the company's profits have only increased by 29.7%, resulting in a PEG ratio of 1.2.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company, which could suggest that they are not comfortable with the stock's price or the business itself.

On a positive note, Jubilant Industries has shown strong results in June 2024, with the highest operating profit to interest ratio of 10.31 times and the lowest debt-equity ratio of 0.69 times. The company also has the highest net sales of Rs 358.14 crore in the quarter.

From a technical standpoint, the stock is currently in a mildly bullish range, with multiple indicators such as MACD, Bollinger Band, KST, DOW, and OBV showing bullish signals.

In the past 3 years, Jubilant Industries has consistently delivered strong returns, outperforming the BSE 500 index in each of the last 3 annual periods. However, with the recent downgrade by MarketsMOJO, investors may want to carefully consider the company's high debt and weak fundamental strength before making any investment decisions.