Marble City India Receives 'Sell' Rating

Marble City India, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO on November 6, 2023. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 7.44%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of 14.49% and operating profit at 12.17% over the last 5 years.
One of the major concerns for Marble City India is its low ability to service debt, with a high Debt to EBITDA ratio of 7.96 times. This was reflected in the company's negative results in September 2023, with the lowest operating cash flow of Rs -3.16 crore and a 36.5% decrease in net sales. The company also had the highest interest expense of Rs 2.45 crore during this period.

In the past year, Marble City India has underperformed the market (BSE 500) with negative returns of -8.33%, while the market generated returns of 16.72%. However, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish.

On a positive note, the stock has an attractive valuation with a ROCE of 4.7 and a 0.9 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, the company's profits have fallen by 21% in the past year, despite the stock generating negative returns.

It is worth noting that the majority of shareholders in Marble City India are non-institutional investors. This may indicate a lack of confidence in the company's performance and future potential. As a microcap company, Marble City India may face challenges in competing with larger players in the trading industry. Investors should carefully consider these factors before making any investment decisions.