MarketsMOJO Downgrades Ram Ratna Wires to 'Sell' Due to High Debt and Poor Growth

Ram Ratna Wires, a smallcap company in the non-ferrous metal industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision is based on several factors, including the company's high debt to EBITDA ratio of 3.13 times, indicating a low ability to service debt. Additionally, the company has shown poor long-term growth with an annual operating profit growth rate of -30.24% over the last 5 years.
In its most recent quarter, the company's results were flat, with a decrease in PBT LESS OI(Q) at Rs 11.57 crore, a decrease in cash and cash equivalents (HY) to the lowest at Rs 2.44 crore, and a decrease in PAT(Q) at Rs 11.53 crore. Despite its small size, domestic mutual funds hold only 0% of the company, which could suggest that they are not comfortable with the company's current price or business.

Other factors to consider include a sideways technical trend, indicating no clear price momentum, and a fair valuation with a 3.2 enterprise value to capital employed and a discount compared to its average historical valuations. However, the company's PEG ratio of 4.2 suggests that its profits have not kept up with its stock's 79.41% return over the past year.

On a positive note, Ram Ratna Wires has consistently outperformed the BSE 500 index over the last 3 years, generating a return of 79.41%. However, with a 'Sell' rating from MarketsMOJO and several concerning financial indicators, investors may want to carefully consider their options before investing in this smallcap company in the non-ferrous metal industry.