Nocil . Downgraded to 'Sell' by MarketsMOJO Due to Poor Growth and Expensive Valuation

Nocil ., a smallcap chemical 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 -7.45% over the last 5 years. In addition, the company's recent financial results for June 2024 showed a decrease in profits, with PAT(Q) falling by -18.6% and PBDIT(Q) at its lowest at Rs 41.05 cr. The operating profit to net sales (Q) was also at its lowest at 11.03%.
One of the main reasons for the downgrade is the company's expensive valuation, with a price to book value of 2.7 and a ROE of 7.8. This is significantly higher than its average historical valuations. Moreover, while the stock has generated a return of 21.10% in the past year, its profits have only increased by 7.5%, resulting in a high PEG ratio of 4.9.

In addition, Nocil . has underperformed the market in the last year, with a return of 21.10% compared to the market's (BSE 500) return of 33.39%. The company also has a low debt to equity ratio, which is a positive factor.

On a technical level, the stock is currently in a mildly bullish range, with both its MACD and KST technical factors showing a bullish trend. However, this may not be enough to offset the negative fundamentals of the company.

It is also worth noting that institutional investors have increased their stake in Nocil . by 0.92% in the previous quarter, collectively holding 12.22% of the company. This suggests that these investors, who have better resources and capabilities to analyze company fundamentals, may also have a negative outlook on the stock.

In conclusion, Nocil . has been downgraded to a 'Sell' by MarketsMOJO due to its poor long-term growth, expensive valuation, and underperformance in the market. While the stock may be in a mildly bullish range on a technical level, the negative fundamentals and lack of interest from institutional investors may be cause for concern for potential investors.