Polson . Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Underperformance

Polson ., a microcap chemical company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including weak long-term fundamental strength, poor ability to service debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the 'Sell' rating is the company's weak CAGR growth in operating profits over the last 5 years, which stands at -9.88%. Additionally, the company's EBIT to Interest ratio is only 1.89, indicating a weak ability to service its debt. The Return on Equity (avg) of 7.10% also suggests low profitability.

From a technical standpoint, the stock is currently in a Mildly Bearish range and has generated -1.55% returns since the downgrade on 21 May 2024. The key technical factor, KST, has also been Bearish since the same date.

Furthermore, Polson . has underperformed the market in the last 1 year, with a return of only 18.67% compared to the market's 36.54% (BSE 500). However, the company did show positive results in December 2023, with a 250.0% growth in PAT(Q) and a 22.60% growth in NET SALES(Q). The OPERATING PROFIT TO NET SALES(Q) was also at its highest at 20.31%.

On a positive note, the company has an attractive valuation with a ROCE of 6.3 and a 1.3 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. Additionally, while the stock has generated a return of 18.67% in the last year, its profits have risen by 45.7%, resulting in a PEG ratio of 0.6.

It is worth noting that the majority shareholders of Polson . are the promoters, which may impact the company's decision-making and future performance. Overall, the downgrade to 'Sell' by MarketsMOJO highlights the current weaknesses and challenges faced by Polson . in the chemical industry.