Majestic Auto Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Majestic Auto, a microcap company in the miscellaneous industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 4th, 2024. This decision was based on several factors, including weak long-term fundamental strength, poor ability to service debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the downgrade is the company's weak CAGR growth in operating profits over the last 5 years, which stands at -9.75%. Additionally, Majestic Auto has a poor EBIT to Interest ratio of 1.86, indicating its inability to service its debt effectively. The company's Return on Equity is also low at 3.84%, and its valuation is considered very expensive with a price to book value of 0.7.

However, there are some positive factors to consider. Majestic Auto has shown a growth in net profit of 313.6% and has declared positive results for the last 4 consecutive quarters. Its profits have also risen by 562.8% in the past year, resulting in a PEG ratio of 0. The company also has a high dividend yield of 3.7% at its current price.

From a technical standpoint, the stock is currently in a mildly bullish range, with both MACD and KST technical factors being bullish. The majority shareholders of Majestic Auto are its promoters, and the company has consistently outperformed BSE 500 in the last 3 annual periods.

In conclusion, while Majestic Auto has shown some positive results in the past year, the overall weak fundamental strength and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any decisions regarding this microcap company.