KPI Green Energy Downgraded to 'Sell' by MarketsMOJO, Despite Strong Growth and Returns

KPI Green Energy, a midcap engineering company specializing in industrial equipment, has recently been downgraded to a 'Sell' by MarketsMOJO on October 29, 2024. This decision was based on several factors, including the company's high debt-to-equity ratio, which is currently at 0 times. Additionally, the stock is currently in a mildly bearish range and has seen a decline of -3.03% since the downgrade.
Technical indicators such as MACD, Bollinger Band, and KST also suggest a bearish trend for the stock. Furthermore, with a ROCE of 17.4, the stock is considered to be very expensive with a 6.1 enterprise value to capital employed. However, it is currently trading at a discount compared to its historical valuations.

Despite these negative factors, KPI Green Energy has shown healthy long-term growth with an annual net sales growth rate of 113.43% and operating profit growth rate of 83.23%. In fact, in June 2024, the company declared very positive results with a 53.6% growth in net profit. It has also consistently declared positive results for the last 12 quarters.

Other positive factors for the company include a low debt-to-equity ratio of 1.24 times and a high operating profit to interest ratio of 4.80 times. In the last quarter, the company's PBT less OI has grown by 71.8% to Rs 90.36 crore.

In terms of returns, KPI Green Energy has consistently outperformed the BSE 500 index in the last 3 annual periods and has generated a return of 167.53% in the last year. However, it is important to note that the company's profits have only increased by 61.7% in the same period, resulting in a PEG ratio of 1.4.

Overall, while KPI Green Energy has shown strong growth and consistent returns, the recent downgrade by MarketsMOJO suggests caution for potential investors. It is important to carefully consider all factors before making any investment decisions.