MarketsMOJO Downgrades Rudra Global Infra Products to 'Sell' Due to Weak Fundamentals

Rudra Global Infra Products, a microcap company in the iron and steel industry, has recently received a 'Sell' rating from MarketsMOJO on May 30, 2024. This downgrade is based on several factors that indicate a weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the company's low ability to service debt, with a high Debt to EBITDA ratio of 0 times. This means that the company may struggle to pay off its debts in the future. Additionally, Rudra Global Infra Products has only seen a 7.97% CAGR growth in Operating Profits over the last 5 years, which is considered weak.

Furthermore, the company's profitability per unit of shareholders' funds is also low, with a Return on Equity (avg) of 11.57%. This indicates that the company is not generating significant profits for its shareholders.

In terms of recent performance, Rudra Global Infra Products had flat results in March 2024, with the highest interest expense of Rs 4.70 crore. However, the stock is currently in a bullish range and has shown improvement in its technical trend since May 29, 2024, generating a return of 1.6% since then. Multiple technical factors, such as MACD, Bollinger Band, and KST, also suggest a bullish outlook for the stock.

Despite these positive technical indicators, the company's valuation is still considered attractive, with a ROCE of 13.8 and an Enterprise value to Capital Employed ratio of 2.3. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

It is worth noting that Rudra Global Infra Products has shown market-beating performance in the last year, generating a return of 105.50%, much higher than the market (BSE 500) returns of 32.41%. However, its profits have only increased by 51.9%, resulting in a PEG ratio of 0.5.

The majority shareholders of Rudra Global Infra Products are the promoters, indicating their confidence in the company's future prospects. However, based on the current fundamental and technical factors, MarketsMOJO has downgraded the stock to 'Sell'. Investors are advised to carefully consider these factors before making any investment decisions.