MarketsMOJO Downgrades Prakash Woollen & Synthetic Mills to 'Sell' Due to Weak Fundamentals and High Debt Levels

Prakash Woollen & Synthetic Mills, a microcap company in the textile industry, has recently received a 'Sell' rating from MarketsMOJO on March 12, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a negative CAGR growth of -183.83% in operating profits over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 10.93 times, indicating a low ability to service debt.
Despite positive results in December 2023, with the company's net sales, PBDIT, and PBT less OI reaching their highest levels, MarketsMOJO still recommends selling the stock. The stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend.

In terms of valuation, Prakash Woollen & Synthetic Mills has a fair ROCE of 0.3 and an enterprise value to capital employed ratio of 0.9. The stock is currently trading at a discount compared to its historical valuations. However, despite a 55.29% return in the past year, the company's profits have only risen by 106.5%, resulting in a low PEG ratio of 0.3.

The majority shareholders of Prakash Woollen & Synthetic Mills are the promoters, indicating their confidence in the company's future prospects. The stock has also outperformed the market (BSE 500) with a return of 55.29% in the last year, compared to the market's return of 36.59%. Overall, MarketsMOJO's downgrade to 'Sell' for Prakash Woollen & Synthetic Mills is based on the company's weak long-term fundamentals and high debt levels, despite its recent positive performance.