Nitta Gelatin India Downgraded to 'Sell' by MarketsMOJO, Negative Results in Q1 2024

Nitta Gelatin India, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on May 13, 2024. This downgrade is based on the company's negative results in the quarter ending March 2024, with a 34.3% decrease in PAT and the lowest PBDIT at Rs 20.11 crore. Additionally, the operating profit to net sales ratio was also at its lowest at 15.42%.
Despite being a microcap company, Nitta Gelatin India has not gained much interest from domestic mutual funds, with only 0.18% of the company's shares being held by them. This could indicate that either the mutual funds are not comfortable with the current price of the stock or they have concerns about the company's business.

In the past year, Nitta Gelatin India has underperformed the market, with a return of only 5.59% compared to the market's return of 31.64%. However, the company has a healthy long-term growth rate, with an annual growth rate of 60.09% in operating profit.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since May 13, 2024, when it was mildly bullish, and has since generated a negative return of -5.53%.

On the positive side, Nitta Gelatin India has a low debt to equity ratio and a very attractive valuation with a price to book value of 2.3. The stock is currently trading at a discount compared to its historical valuations. Additionally, while the stock has only generated a return of 5.59% in the past year, its profits have increased by 21.6%, resulting in a low PEG ratio of 0.4.

In conclusion, based on the recent downgrade and the company's negative results, it may be wise for investors to consider selling their shares in Nitta Gelatin India. However, the company's healthy long-term growth and attractive valuation could make it a potential investment opportunity for those with a longer investment horizon. As always, it is important for investors to conduct their own research and make informed decisions before investing in any stock.