MarketsMOJO Downgrades Vikram Thermo (India) to 'Sell' Due to High Valuation and Lack of Investor Confidence

Vikram Thermo (India) is a microcap company in the chemicals industry. Recently, MarketsMOJO downgraded its stock to 'Sell' on October 3rd, 2024. This decision was based on several factors, including the company's high valuation with a price to book value of 4.7 and a ROE of 25.4.
In addition, the stock is currently trading at a premium compared to its historical valuations. Despite its strong performance in the past year with a 59.96% return, the company's profits have only increased by 58%, resulting in a low PEG ratio of 0.3.

One concerning aspect is that domestic mutual funds hold only 0% of the company, indicating a lack of confidence in the stock. This is surprising considering the company's low debt to equity ratio and healthy long-term growth with an annual operating profit growth rate of 36.40%.

On a positive note, Vikram Thermo (India) reported strong results in June 2024, with the highest PBT LESS OI(Q) at Rs 11.02 crore and PAT(Q) at Rs 8.99 crore. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

Despite consistent returns over the last 3 years and outperforming the BSE 500, the stock's technical trend has deteriorated since October 3rd, 2024, generating -3.43% returns. Overall, while Vikram Thermo (India) may have potential, investors should carefully consider the current market conditions and do their own research before making any investment decisions.