MarketsMOJO Downgrades Ajanta Soya to 'Hold' Due to Low Debt to Equity Ratio

Ajanta Soya, a microcap company in the refined oil and vanaspati industry, has recently been downgraded to a 'Hold' by MarketsMOJO on October 22, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
However, the company has shown positive results in the last two consecutive quarters, with a growth in net profit of 62.45% in June 2024. Its PBDIT(Q) is also at its highest at Rs 5.20 crore, while its operating profit to net sales(Q) and PBT less OI(Q) are also at their highest levels.

Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also showing bullish trends. With a ROE of 7.9, the stock is fairly valued with a price to book value of 2.6. It is currently trading at a fair value compared to its historical valuations.

In the past year, the stock has generated a return of 22.09%, while its profits have risen by 196.9%. This gives the company a PEG ratio of 0.2, indicating a good value for investors.

It is worth noting that the majority shareholders of Ajanta Soya are non-institutional investors. However, the company has shown poor long-term growth, with its operating profit declining at an annual rate of -230.27% over the last 5 years.

Overall, while Ajanta Soya may not be a strong buy at the moment, it is still a company worth keeping an eye on for potential future growth.