Likhitha Infrastructure Downgraded to 'Sell' by MarketsMOJO: Factors and Analysis

Likhitha Infrastructure, a smallcap company in the capital goods industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 4, 2024. This decision was based on several factors, including flat results in June 2024 and a low ROCE (return on capital employed) of 29.41%. Additionally, the company's ROE (return on equity) of 21.2% indicates an expensive valuation with a price to book value of 4.6.
Despite generating a return of 20.29% in the past year, Likhitha Infrastructure's profits have only risen by 6.7%, resulting in a high PEG (price/earnings to growth) ratio of 3.2. This underperformance in the market, with the stock generating lower returns compared to the BSE 500 index, is another reason for the 'Sell' rating.

On a positive note, the company has a low debt to equity ratio and has shown healthy long-term growth with an annual increase in net sales of 27.05% and operating profit of 18.35%. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. Since the downgrade on November 4, 2024, the stock has generated -3.45% returns.

Institutional investors have also shown an increasing interest in Likhitha Infrastructure, with a 0.84% increase in their stake in the company over the previous quarter. These investors have better resources and capabilities to analyze the fundamentals of companies, making their participation a significant factor to consider.

Overall, based on the current information and analysis, MarketsMOJO has downgraded Likhitha Infrastructure to a 'Sell'. Investors should carefully consider these factors before making any decisions regarding this smallcap company in the capital goods industry.