MarketsMOJO downgrades Parmax Pharma to 'Sell' due to weak fundamentals and underperformance

Parmax Pharma, a microcap pharmaceutical company, has recently received a 'Sell' rating from MarketsMOJO on January 9, 2024. This downgrade is based on the company's weak long-term fundamental strength, as evidenced by its operating losses and poor growth in net sales and operating profit over the past five years. Additionally, Parmax Pharma's ability to service its debt is also a concern, with a low EBIT to Interest ratio of 0.66.
The company's performance in the recent quarter (September 2023) has also been lackluster, with its PBDIT (Quarterly) at a low of Rs -0.76 crore and EPS (Quarterly) at Rs -3.66. This trend of below-par performance has been consistent in both the long-term and near-term, with the stock generating -14.53% returns in the last year and underperforming the BSE 500 index in the last three years, one year, and three months.

On a positive note, Parmax Pharma's stock is currently in a mildly bullish range and has multiple bullish indicators such as MACD, Bollinger Band, and KST. It also has an attractive valuation with a ROCE of -0.7 and a 2.1 Enterprise value to Capital Employed. Furthermore, the stock is currently trading at a discount compared to its average historical valuations.

It is worth noting that the majority of Parmax Pharma's shareholders are non-institutional investors. Despite a 75.3% increase in profits over the past year, the stock has still generated negative returns. This could be a cause for concern for potential investors. Overall, MarketsMOJO's 'Sell' rating on Parmax Pharma suggests caution for investors considering this microcap pharmaceutical company.