MarketsMOJO downgrades Grovy India to 'Sell' due to weak fundamentals and high pledged shares

Grovy India, a microcap company in the finance/NBFC industry, has recently been downgraded to a 'Sell' by MarketsMOJO on January 15, 2024. This decision was based on the company's weak long-term fundamental strength, with an average return on equity (ROE) of 5.99%. Additionally, the stock is currently trading at a premium compared to its historical valuations and has underperformed the market in the past year, generating negative returns of -9.61%.
One of the main reasons for the downgrade is the high percentage of promoter shares that are pledged, currently at 27.89%. This can put additional downward pressure on the stock prices in falling markets. Furthermore, the proportion of pledged holdings has increased by 0.62% over the last quarter.

On a positive note, Grovy India did show positive results in September 2023, with a growth of 44.91% in net sales and the highest PBDIT (profit before depreciation, interest, and taxes) and PBT (profit before taxes) in the last quarter. However, these results were not enough to outweigh the overall weak performance of the company.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, these technical indicators should not be the sole basis for investment decisions.

In conclusion, considering the weak long-term fundamentals and underperformance of Grovy India in the past year, MarketsMOJO has downgraded the stock to a 'Sell'. Investors should carefully evaluate all factors before making any investment decisions.