MarketsMOJO Downgrades Orient Cement to 'Sell' Due to Poor Growth and Declining Profits

Orient Cement, a midcap company in the cement industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 25, 2024. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of -0.33% over the last 5 years.
In addition, the company's financial results for September 2024 showed a decline in profits, with a -90.6% decrease in PAT(Q) at Rs 2.32 crore and the lowest cash and cash equivalents (HY) at Rs 6.77 crore. The debtors turnover ratio (HY) was also at its lowest at 13.70 times.

Furthermore, Orient Cement has an expensive valuation with a price to book value of 3.8 and a return on equity of 8.7. However, the stock is currently trading at a discount compared to its average historical valuations.

Despite generating a return of 43.24% in the past year, the company's profits have fallen by -2.8%. On a positive note, Orient Cement has a strong ability to service debt with a low debt to EBITDA ratio of 1.07 times.

Technically, the stock is in a mildly bullish range and has multiple bullish factors such as MACD, KST, and OBV. Additionally, the company has a high institutional holding of 23.59%, indicating that these investors have better capabilities and resources to analyze the company's fundamentals.

In the long term, Orient Cement has shown market-beating performance and has outperformed BSE 500 in the last 3 years, 1 year, and 3 months. However, considering the recent downgrade and the company's financial results, MarketsMOJO has recommended a 'Sell' for Orient Cement.