Kesar Enterprises Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Poor Growth

Kesar Enterprises, a microcap company in the sugar industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 19, 2024. This decision was based on several factors, including the company's high debt to EBITDA ratio of 3.95 times, indicating a low ability to service debt. Additionally, the company's Return on Capital Employed (avg) of 6.42% suggests low profitability per unit of total capital.
Furthermore, Kesar Enterprises has shown poor long-term growth with a decline in net sales by an annual rate of -0.65% and operating profit at 15.34% over the last 5 years. In the most recent quarter, the company's net sales have fallen by -47.7%, PBT LESS OI by -731.1%, and PAT by -181.9%. These results, along with the negative operating profits, make the stock a risky investment.

On the positive side, Kesar Enterprises has a high management efficiency with a ROE of 23.00%. Technically, the stock is in a mildly bullish range with multiple factors such as MACD, KST, and DOW indicating a bullish trend. However, it is worth noting that the majority shareholders of the company are promoters, which may raise concerns for some investors.

Despite the recent market beating performance with a return of 87.51% in the last year, Kesar Enterprises' profits have only risen by 278.5%, resulting in a PEG ratio of 0. This suggests that the stock may be overvalued compared to its historical valuations. Overall, considering the current financial situation and market performance, MarketsMOJO has downgraded Kesar Enterprises to a 'Sell'.