Mangalam Organics Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Fundamentals

Mangalam Organics, a microcap company in the chemicals industry, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with a -142.15% CAGR growth in operating profits over the last 5 years.
Despite declaring positive results for the last 5 consecutive quarters, the company's PAT (HY) has only grown at 306.38%, and its operating profit to interest (Q) is at its highest at 2.97 times. Additionally, its PBDIT (Q) is also at its highest at Rs 12.34 cr.

Technically, the stock is in a mildly bullish range, with the Bollinger Band being bullish since 22 Oct 2024. However, with an ROCE of 4.2, the stock is fairly valued with a 1.3 enterprise value to capital employed. It is also currently trading at a discount compared to its average historical valuations.

While the stock has generated a return of 34.07% over the past year, its profits have only risen by 258.5%, resulting in a PEG ratio of 0.3. This indicates that the stock may be overvalued.

On a positive note, promoter confidence in the company is rising, with promoters increasing their stake by 3.74% over the previous quarter and currently holding 58.65% of the company. This is a sign of high confidence in the future of the business.

In conclusion, while Mangalam Organics may have shown positive results in the past few quarters, its weak long-term fundamental strength and overvalued stock make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.