MarketsMOJO Downgrades Visco Trade Associates to 'Hold' Amidst Mixed Financial Performance and Technical Trends

Visco Trade Associates, a microcap trading company, has recently been downgraded to a 'Hold' by MarketsMOJO on July 22, 2024. This decision was based on the company's recent financial performance and market trends.
While Visco Trade Associates has shown healthy long-term growth with an annual increase of 69.42% in net sales and 134.71% in operating profit, its current growth rate of 32.05% in net sales is still positive. The company has also declared positive results for the past 7 consecutive quarters, with PBT LESS OI(Q) growing at 174.18% and PAT(Q) growing at 162.8%. Additionally, the company's ROCE(HY) is at its highest at 24.23%, making it an attractive valuation with a 1.4 enterprise value to capital employed.

However, despite these positive aspects, there are some concerns about the company's management efficiency. With a low ROCE of 1.37%, the company's profitability per unit of total capital is low. Furthermore, the company has a high debt to EBITDA ratio of 4.19 times, indicating a low ability to service debt. This is also reflected in the company's low return on equity (avg) of 1.93%.

Technically, the stock is currently in a mildly bearish range, with its technical trend deteriorating from mildly bullish on July 22, 2024. The stock's MACD and KST technical factors are also bearish, further supporting the 'Hold' recommendation.

In the past year, while the market (BSE 500) has generated a return of 35.14%, Visco Trade Associates has underperformed with negative returns of -26.99%. This could be a cause for concern for investors.

It is worth noting that the promoters of Visco Trade Associates have increased their stake in the company by 1.39% in the previous quarter, currently holding 69.04% of the company. This could be seen as a sign of high confidence in the future of the business.

In conclusion, while Visco Trade Associates has shown positive growth and strong promoter confidence, there are concerns about its management efficiency and technical trends. Investors may want to hold off on buying or selling the stock until there is more clarity on these factors.