Kesar Petroproducts Downgraded to 'Sell' by MarketsMOJO, Weak Fundamentals Raise Concerns

Kesar Petroproducts, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 18, 2024. This decision was based on the company's weak long-term fundamental strength, with a -56.95% CAGR growth in operating profits over the last 5 years. Additionally, the company's ROCE of -1.7 indicates a very expensive valuation with a 1.7 enterprise value to capital employed.
Despite the stock trading at a fair value compared to its historical valuations, it has generated a return of 209.51% in the past year. However, its profits have only risen by 907%, resulting in a PEG ratio of 0. This suggests that the stock may be overvalued and not a good investment option.

On a positive note, Kesar Petroproducts has declared positive results for the last 4 consecutive quarters, with a higher PAT of Rs 5.04 crore and a 20.2% growth in net sales in the last quarter. Its PBDIT also reached a record high of Rs 3.42 crore.

From a technical standpoint, the stock is currently in a mildly bullish range, with both its MACD and KST technical factors showing a bullish trend. However, it is important to note that the majority shareholders of the company are promoters, which may raise concerns about potential conflicts of interest.

In terms of market performance, Kesar Petroproducts has outperformed the market (BSE 500) with a return of 209.51% in the last year, compared to the market's return of 23.90%. However, with the recent downgrade by MarketsMOJO and the company's weak long-term fundamentals, it may be wise for investors to approach this stock with caution.