MarketsMOJO Downgrades Samrat Pharmachem to 'Sell' Based on Technical and Performance Indicators

Samrat Pharmachem, a microcap pharmaceutical company, has recently been downgraded to a 'Sell' by MarketsMOJO on August 6, 2024. This decision was based on technical factors such as the stock being in a Mildly Bearish range, as well as the MACD and KST indicators showing a Bearish trend.
In addition to its poor performance in the long term, with a -1.70% return in the last year and underperforming the BSE 500 index, Samrat Pharmachem also has a below par performance in the near term. However, the company has shown high management efficiency with a ROCE of 26.80% and a strong ability to service debt with a low Debt to EBITDA ratio of 0.67 times.

Despite these positive factors, the company's net sales have only grown at an annual rate of 20.43% and operating profit has decreased by -8.29%. However, the latest quarterly results in March 2024 have shown promising numbers, with the highest net sales and PBDIT at Rs 82.68 cr and Rs 1.35 cr respectively, and the highest operating profit to net sales ratio at 1.63%.

With a ROCE of 56.1, Samrat Pharmachem has an attractive valuation with a 1.7 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. However, despite a -1.70% return in the past year, the company's profits have fallen by -87%.

It is worth noting that the majority shareholders of Samrat Pharmachem are the promoters themselves. This may raise concerns about the company's future potential and investor interest, but it is important to stick to the facts and avoid speculation. Overall, MarketsMOJO's downgrade to 'Sell' for Samrat Pharmachem is based on the current technical and performance indicators, and investors should carefully consider these factors before making any investment decisions.