MarketsMOJO Downgrades Bombay Dyeing & Manufacturing Company to 'Sell' Due to High Debt and Poor Growth

Bombay Dyeing & Manufacturing Company, a smallcap company in the diversified industry, has recently been downgraded to a 'Sell' by MarketsMOJO on June 19, 2024. This decision was based on several factors, including the company's high debt-to-equity ratio of 23.46 times, indicating a risky financial position. Additionally, the company has shown poor long-term growth with a decline in net sales by an annual rate of -17.54% and operating profit at -154.46% over the last 5 years.
Furthermore, the company's recent financial results for March 2024 have been flat, with a negative PAT of Rs -109.56 crore and a decline in net sales by -23.0%. The operating profit to interest ratio is also at its lowest at -8.45 times, indicating a negative EBITDA. These factors contribute to the overall riskiness of the stock.

On a positive note, the stock is technically in a mildly bullish range and has shown multiple bullish indicators such as MACD, Bollinger Band, KST, and OBV. Additionally, institutional investors have increased their stake in the company by 1.12% in the previous quarter, collectively holding 3.37% of the company. This suggests that these investors have better resources and capabilities to analyze the company's fundamentals.

Despite its recent downgrade, Bombay Dyeing & Manufacturing Company has shown market-beating performance in the long term as well as the near term, with a return of 75.38% in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months. However, considering the company's high debt and poor long-term growth, it may be wise for investors to approach this stock with caution.