NCL Industries Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth and Decrease in Promoter Stake

NCL Industries, a microcap cement company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on the company's poor long-term growth, as its operating profit has declined by an annual rate of -35.55% over the last 5 years. Additionally, the company reported negative results in June 2024 after two consecutive positive quarters, with a significant decrease in PAT(Q) at Rs 12.77 cr and NET SALES(Q) at Rs 407.07 cr.
Moreover, the promoters of NCL Industries have decreased their stake in the company by -1.4% over the previous quarter, which may indicate a lack of confidence in the future of the business. The stock has also underperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a return of -6.51% in the last 1 year.

However, the company has a strong ability to service debt, with a low Debt to EBITDA ratio of 1.33 times. The technical trend of the stock is currently sideways, indicating no clear price momentum. The stock is also trading at a discount compared to its average historical valuations, with an attractive valuation of 1.1 Enterprise value to Capital Employed and a ROCE of 14.9.

Despite these positive factors, the stock has generated a return of -6.51% in the past year, while its profits have increased by 17.7%. This has resulted in a PEG ratio of 0.8, which may be a cause for concern for potential investors. Overall, NCL Industries' recent downgrade to 'Sell' by MarketsMOJO highlights the company's below-par performance in both the long-term and near-term.