Kabra Extrusion Technik Downgraded to 'Sell' by MarketsMOJO Amid Declining Profits

Kabra Extrusion Technik, a smallcap company in the engineering industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 23, 2024. This decision was based on the company's negative results in June 2024, following flat results in March 2024. The company's profits have fallen by a significant -65.2% in the last quarter, with the lowest DPR (profit margin) and ROCE (return on capital employed) in the industry.
Despite being a smallcap company, Kabra Extrusion Technik has not gained much interest from domestic mutual funds, with only 0.03% of the company's shares being held by them. This could indicate that either the mutual funds are not comfortable with the company's current price or they have concerns about its business.

In the past year, the stock has underperformed the market, generating a return of only 2.28% compared to the market's return of 40.49%. However, the company has a low debt to equity ratio and has shown healthy long-term growth with an annual operating profit growth rate of 45.67%.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and OBV indicating a bullish trend. With a ROE (return on equity) of 7.5, the stock is currently trading at a fair valuation with a price to book value of 3.6. This is in line with its average historical valuations.

However, it is important to note that while the stock has generated a positive return in the past year, its profits have declined by -23.2%. This could be a cause for concern for potential investors.

In conclusion, while Kabra Extrusion Technik may have some positive aspects such as a low debt to equity ratio and healthy long-term growth, the recent downgrade to 'Sell' by MarketsMOJO and the company's declining profits may make it a risky investment option. Investors are advised to do their own research and consider all factors before making any investment decisions.