Raj Television Network Downgraded to 'Sell' by MarketsMOJO, Concerns Over Valuation and Debt Serviceability

Raj Television Network, a microcap company in the TV broadcasting and software industry, has recently been downgraded to a 'Sell' by MarketsMOJO on February 16, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 4.43%. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 1.60.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a ROCE of 2.7 and an Enterprise value to Capital Employed ratio of 2.2. However, the stock is currently trading at a discount compared to its average historical valuations. Despite generating a return of 33.43% in the past year, the company's profits have fallen by -87.5%.

On a positive note, Raj Television Network has shown strong results in December 2023, with the highest DEBTORS TURNOVER RATIO (HY) at 3.43 times and NET SALES (Q) at Rs 39.54 crore. The stock is also technically in a mildly bullish range, with its MACD and KST technical factors also being bullish.

The majority shareholders of Raj Television Network are its promoters, who have consistently generated returns over the last 3 years. In fact, the stock has outperformed BSE 500 in each of the last 3 annual periods, making it a consistent performer in the market.

Overall, while the recent downgrade may be a cause for concern, Raj Television Network has shown potential for growth and consistent returns in the past. Investors should carefully consider all factors before making any decisions regarding this microcap company.