MarketsMOJO Downgrades Samhi Hotels to 'Sell' Due to Weak Fundamentals and High Debt.

MarketsMOJO has downgraded its stock call on Samhi Hotels to 'Sell' due to weak long-term fundamental strength and high debt levels. The company's average Return on Capital Employed (ROCE) of 5.07% and slow growth in operating profit over the past 5 years are concerning factors. Additionally, the high Debt to EBITDA ratio of 7.41 times indicates a low ability to service debt.
The stock is also considered to be very expensive with a 2.1 Enterprise value to Capital Employed. While the stock has generated a return of 33.30% in the past year, its profits have only risen by 55%. This suggests that the stock may be overvalued.

On a positive note, the company has declared positive results for the last 3 consecutive quarters, with a growth in operating profit of 23.16%. However, the company's PAT(Q) at Rs 4.23 cr has only grown by 110.5%, and its NET SALES(HY) at Rs 529.05 cr has grown by 33.86%. The PBT LESS OI(Q) is also at its highest at Rs -3.44 cr.

Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also showing bullish signals. However, the high institutional holdings at 81.25% suggest that these investors have better capability and resources to analyze the company's fundamentals than most retail investors.

In conclusion, MarketsMOJO's downgrade to 'Sell' for Samhi Hotels is based on the company's weak long-term fundamentals and high debt levels. While the stock may have shown positive results in the past few quarters, its overall growth and valuation raise concerns for potential investors.