Mangal Credit & Fincorp Downgraded to 'Sell' by MarketsMOJO, Despite Positive Results

Mangal Credit & Fincorp, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-08-12. This decision was based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 7.71%. In the last year, the stock has underperformed the market, generating a return of only 15.59% compared to the market's 35.35% return.
However, the company has declared positive results for the last 7 consecutive quarters, with a PAT (HY) of Rs 5.45 crore, showing a growth of 26.74%. Its NET SALES (Q) are also at a record high of Rs 9.43 crore, and its PBDIT (Q) is at its highest at Rs 6.46 crore.

Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. With an ROE of 9.2, the stock is fairly valued with a price to book value of 2.1. However, it is currently trading at a premium compared to its average historical valuations.

It is worth noting that while the stock has generated a return of 15.59% in the last year, its profits have risen by 33.4%, resulting in a PEG ratio of 0.8. This indicates that the stock may be overvalued at its current price.

The majority shareholders of Mangal Credit & Fincorp are the promoters, which may raise concerns for potential investors. It is important to carefully consider all these factors before making any investment decisions.