Kerala Ayurveda Downgraded to 'Sell' by MarketsMOJO, Despite Positive Factors

Kerala Ayurveda, a microcap company in the pharma industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 2, 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 net sales growing at an annual rate of 12.19% and operating profit at 0% over the last 5 years, and a high debt-to-equity ratio of 0 times.
Additionally, the stock is currently trading at a premium compared to its historical valuations and has a very expensive valuation with a 5.7 Enterprise value to Capital Employed. Despite generating a return of 162.47% in the past year, the company's profits have fallen by -79%.

However, there are some positive factors for the company, such as its highest net sales and operating profit to interest in the last quarter, as well as a high amount of cash and cash equivalents. The stock is also technically in a mildly bullish range, with multiple indicators such as MACD, Bollinger Band, and KST showing bullish signals.

The majority shareholders of Kerala Ayurveda are the promoters, and the company has consistently generated returns over the last 3 years. In fact, it has outperformed the BSE 500 in each of the last 3 annual periods. While the stock may currently be facing some challenges, it is important to keep an eye on its performance in the future.