Manomay Tex India Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Expensive Valuation

Manomay Tex India, a microcap textile company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 9, 2024. This decision was based on several factors, including the company's high debt and weak long-term fundamental strength. Over the past 5 years, the company has only seen a modest growth in net sales and operating profit, with a debt to equity ratio of 1.61 times.
In addition, Manomay Tex India has an expensive valuation with a ROCE of 8.3 and an enterprise value to capital employed ratio of 1.7. The stock is currently trading at a premium compared to its historical valuations. Despite generating a return of 79.59% in the past year, the company's profits have actually decreased by 0%, resulting in a high PEG ratio of 27.4.

On a positive note, the company has consistently shown strong operating profit to interest ratio, PBDIT, and PAT, with the highest values in the industry. The stock is also technically in a mildly bullish range, with multiple factors such as MACD, KST, DOW, and OBV indicating a bullish trend.

The majority shareholders of Manomay Tex India are the promoters, who have consistently delivered returns over the last 3 years. In fact, the stock has outperformed BSE 500 in each of the last 3 annual periods, making it a promising investment option for those looking for consistent returns. However, considering the current market conditions and the company's financials, MarketsMOJO has downgraded the stock to a 'Sell'.