NMS Global Receives 'Sell' Rating Due to High Debt and Weak Growth

NMS Global, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including the company's high debt and weak long-term fundamental strength. With a debt-to-equity ratio of 14.26 times, NMS Global's financial stability is a cause for concern.
In addition, the company has shown poor long-term growth, with net sales growing at an annual rate of 16.28% and operating profit at -65.77% over the last 5 years. Its debt-to-equity ratio (avg) is also high at 2.60 times, indicating a heavy reliance on debt for financing.

Furthermore, NMS Global's return on equity (avg) is only 1.63%, indicating low profitability per unit of shareholders' funds. Its ROCE of 3.3 also suggests an expensive valuation, with an enterprise value to capital employed ratio of 1.9.

Despite the stock's recent return of 235.11%, its profits have only risen by 79%, resulting in a low PEG ratio of 0.1. This indicates that the stock may be overvalued and not a good investment opportunity.

On a positive note, NMS Global has shown positive results in September 2023, with higher net sales and PBDIT (Q) at Rs 8.09 cr and Rs 0.43 cr respectively. However, the majority of the company's shareholders are non-institutional, which may raise concerns about corporate governance.

Technically, the stock is currently in a bullish range, but the trend has deteriorated since January 20, 2024, with a return of only 1.99%. Despite this, multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV are still bullish for the stock.

In the past year, NMS Global has outperformed the market (BSE 500) with a return of 235.11%, compared to the market's return of 23.79%. However, with the recent downgrade and concerns about the company's financial stability, it may be wise for investors to approach this stock with caution.