MarketsMOJO Downgrades Sequent Scientific to 'Sell' Due to Weak Fundamentals and Expensive Valuation

Sequent Scientific, a smallcap pharmaceutical company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 22, 2024. This decision was based on the company's weak long-term fundamental strength, with a -200.35% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low profitability per unit of shareholders' funds, with a Return on Equity (avg) of 7.53%.
Furthermore, Sequent Scientific has an expensive valuation with a 4.6 Enterprise value to Capital Employed and is currently trading at a discount compared to its average historical valuations. Despite generating a return of 71.51% in the past year, the company's profits have only risen by 94.5%.

On a positive note, the company has shown promising results in June 2024, with PBT LESS OI(Q) growing at 128.28% and PBDIT(Q) reaching its highest at Rs 41.95 cr. Additionally, the OPERATING PROFIT TO NET SALES(Q) is also at its highest at 10.75%.

Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. The majority shareholders of Sequent Scientific are the promoters, indicating their confidence in the company's future.

Despite its market-beating performance, MarketsMOJO has downgraded Sequent Scientific to 'Sell' due to its weak fundamental strength and expensive valuation. Investors are advised to carefully consider these factors before making any investment decisions.