MarketsMOJO downgrades Graviss Hospitality to 'Sell' due to weak fundamentals and high debt

Graviss Hospitality, a microcap company in the hotel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on April 23, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 0.66%, poor long-term growth with a 2.56% annual growth rate in Net Sales over the last 5 years, and a weak ability to service its debt with a poor EBIT to Interest (avg) ratio of -4.95.
Additionally, the company's current valuation is considered expensive with a Price to Book Value of 1.9 and a PEG ratio of 0. However, the stock is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 98.65%, while its profits have risen by 550%.

Other factors to consider include the company's high DEBTORS TURNOVER RATIO (HY) of 217.84 times, PBDIT(Q) of Rs 5.68 cr., and OPERATING PROFIT TO NET SALES(Q) of 34.74%, all of which are the highest in their respective categories. Technically, the stock is currently in a Mildly Bullish range, with both its MACD and KST technical factors also being Bullish.

Graviss Hospitality's majority shareholders are its promoters, and the company has consistently generated returns over the last 3 years. In fact, it has outperformed the BSE 500 in each of the last 3 annual periods. While the stock may currently be facing some challenges, it is important to note that it has shown strong performance in the past and has the potential to bounce back in the future. Investors should carefully consider all factors before making any decisions regarding this stock.