Navin Fluorine International Limited Downgraded to 'Sell' by MarketsMOJO Due to Negative Financial Performance and Expensive Valuation

Navin Fluorine International Limited, a midcap chemical company, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-08-13. This decision was based on the company's negative financial results for the past 5 quarters, with a decrease of -21.00% in PBT LESS OI(Q) at Rs 58.04 crore and a ROCE(HY) at its lowest of 9.54%. Additionally, the company's DEBT-EQUITY RATIO(HY) is at its highest of 0.57 times, indicating a high level of debt.
The stock is currently trading at a discount compared to its average historical valuations, with a ROCE of 9.3 and an expensive valuation of 5.3 Enterprise value to Capital Employed. In the past year, the stock has generated a return of -26.74%, while its profits have fallen by -39.7%. This below par performance has also been reflected in the company's long term and near term performance, with underperformance against BSE 500 in the last 3 years, 1 year, and 3 months.

However, there are some positive factors to consider. The company has a high management efficiency with a ROCE of 20.59% and a low Debt to Equity ratio (avg) of 0.07 times. It also has a healthy long term growth rate, with Net Sales growing at an annual rate of 16.17% and Operating profit at 26.47%.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated from Mildly Bullish on 13-Aug-24, generating -5.27% returns since then.

It is worth noting that the company has a high institutional holding at 45.43%, indicating that these investors have better capability and resources to analyze the company's fundamentals compared to most retail investors. Their stake has also increased by 1.25% over the previous quarter.

Overall, while Navin Fluorine International Limited has some positive aspects, the recent downgrade to 'Sell' by MarketsMOJO highlights the company's negative financial performance and expensive valuation. Investors should carefully consider these factors before making any investment decisions.