Paras Defence and Space Technologies Receives 'Sell' Rating from MarketsMOJO

Paras Defence and Space Technologies, a smallcap company in the defence industry, has recently received a 'Sell' rating from MarketsMOJO on November 11, 2024. This downgrade is due to the company's poor long-term growth, with an annual operating profit growth rate of -4.61% over the last 5 years. Additionally, the company's ROCE of 11 indicates a very expensive valuation, with an enterprise value to capital employed ratio of 7.9.
Furthermore, the stock is currently trading at a premium compared to its average historical valuations. Despite a 43.09% return in the past year, the company's profits have only risen by 26.1%, resulting in a high PEG ratio of 4.1. It is also worth noting that domestic mutual funds hold a small stake of only 0.16% in the company, which could indicate their discomfort with the current price or the business itself.

On a positive note, the company has a low debt to equity ratio of 0.04 times and has shown promising results in September 2024. Its PAT (HY) has grown by 86.07%, while its net sales (Q) have reached a record high of Rs 87.09 crore. However, its PBT less OI (Q) has only grown by 49.1%.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. This trend has deteriorated from mildly bullish on November 8, 2024, and has generated a -0.6% return since then.

Despite its market-beating performance of 43.09% in the last year, Paras Defence and Space Technologies may not be a wise investment choice at this time, as indicated by the 'Sell' rating from MarketsMOJO. Investors should carefully consider the company's high valuation and poor long-term growth before making any decisions.