MarketsMOJO Downgrades Ashirwad Capital to 'Sell' Amidst Weak Fundamentals and Institutional Investor Decrease

Ashirwad Capital, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on May 10, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 6.41% and poor long-term growth with an annual operating profit growth rate of only 7.77%.
In addition, there has been a decrease in institutional investor participation, with a -0.83% decrease in stake over the previous quarter. This is significant as institutional investors have better resources and capabilities to analyze company fundamentals compared to retail investors.

However, there have been some positive results for Ashirwad Capital in December 2023, with the company reporting its highest PAT (Q) at Rs 0.73 crore, PBDIT (Q) at Rs 0.78 crore, and PBT LESS OI (Q) at Rs 0.77 crore.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

With a ROE of 10.9, the stock is fairly valued with a price to book value of 2.8. However, it is currently trading at a premium compared to its historical valuations.

Despite the recent downgrade, Ashirwad Capital has shown market-beating performance, generating a return of 62.66% in the last year, which is significantly higher than the market (BSE 500) returns of 31.42%.

Investors should carefully consider these factors before making any decisions regarding Ashirwad Capital stock.