MarketsMOJO Downgrades Mohit Paper Mills to 'Sell' Due to Weak Fundamentals and High Debt

Mohit Paper Mills, a microcap company in the paper and paper products industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 4, 2024. This decision was based on several factors, including weak long-term fundamental strength, poor growth in operating profit, and a high debt to EBITDA ratio. The company's average Return on Capital Employed (ROCE) over the last 5 years has been 5.27%, indicating a weak long-term fundamental strength. Additionally, the operating profit has only grown at an annual rate of 9.28% over the same period, showing poor long-term growth. Furthermore, Mohit Paper Mills has a high Debt to EBITDA ratio of 6.09 times, indicating a low ability to service debt. In the latest quarter, the company's profits have also decreased by 39.63% compared to the previous year. On a positive note, the stock is currently in a Mildly Bullish range and has multiple bullish factors such as MACD, KST, and OBV. It also has an attractive valuation with a ROCE of 5.4 and a 1.1 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, Mohit Paper Mills has generated a return of 57.12%, but its profits have only increased by 2.5%. This results in a PEG ratio of 3.9, indicating that the stock may be overvalued. The majority shareholders of the company are the promoters. Despite consistent returns over the last 3 years and outperforming the BSE 500 index, MarketsMOJO has downgraded Mohit Paper Mills to a 'Sell' due to its weak long-term fundamentals and high debt. Investors should carefully consider these factors before making any investment decisions regarding this microcap company.