MarketsMOJO Downgrades Riddhi Siddhi Gluco Biols to 'Sell' Due to Weak Financial Performance

Riddhi Siddhi Gluco Biols, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on February 27, 2024. This decision was based on the company's weak long-term fundamental strength, poor ability to service its debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the downgrade is the company's -185.93% CAGR growth in operating profits over the last 5 years. This indicates a decline in the company's financial performance. Additionally, the company's EBIT to Interest (avg) ratio of -0.72 suggests that it may struggle to meet its debt obligations.

Moreover, the stock is considered risky as it is trading above its average historical valuations. Although the stock has generated a return of 77.91% in the past year, its profits have only increased by 611.8%. This is reflected in the company's PEG ratio of 0, which is below the industry average.

However, there are some positive factors to consider. The company has shown a growth in net sales of 373.35% and has declared positive results for the last 4 consecutive quarters. In fact, in December 2023, the company declared very positive results with a PAT(Q) of Rs 7.98 crore, which has grown by 82.1%.

From a technical standpoint, the stock is currently in a mildly bullish range with both the MACD and KST technical factors showing a bullish trend. Additionally, the majority shareholders of the company are promoters, which can be seen as a vote of confidence in the company's future.

In terms of market performance, Riddhi Siddhi Gluco Biols has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months. This suggests that the company has the potential to perform well in the long term as well as the near term.

Overall, while there are some positive aspects to consider, the downgrade to 'Sell' by MarketsMOJO highlights the company's weak financial performance and potential risks for investors. It is important for investors to carefully evaluate all factors before making any investment decisions.