Rajratan Global Wire Downgraded to 'Sell' by MarketsMOJO, Technical Indicators Suggest Bearish Trend

Rajratan Global Wire, a smallcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 29, 2024. This decision was based on several factors, including flat results in June 2024, a low operating cash flow of Rs 105.58 crore, and a low return on capital employed (ROCE) of 16.59%. Additionally, the profit before tax less other income for the quarter has fallen by -12.6%.
From a technical standpoint, the stock is currently in a mildly bearish range and has generated -1.34% returns since August 29, 2024. Multiple indicators, such as MACD, Bollinger Band, and KST, also suggest a bearish trend for the stock.

At a ROCE of 16.5, the stock is considered to have an expensive valuation with an enterprise value to capital employed ratio of 4.8. However, it is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated negative returns of -19.69%, while its profits have also fallen by -4.3%.

In the last year, Rajratan Global Wire has underperformed the market (BSE 500), which has generated returns of 38.88%. This smallcap company has generated negative returns of -19.69% during the same period.

On a positive note, the company has shown high management efficiency with a ROCE of 23.09%. It also has a strong ability to service debt with a low debt to EBITDA ratio of 1.50 times. Furthermore, its operating profit has grown at an annual rate of 41.22%, indicating healthy long-term growth potential.

The majority shareholders of Rajratan Global Wire are the promoters, which can be seen as a positive sign for investors. However, considering the recent downgrade and the bearish trend, it may be wise for investors to approach this stock with caution.