Ramky Infrastructure Receives 'Sell' Rating Due to High Debt and Weak Fundamentals

Ramky Infrastructure, a smallcap company in the capital goods industry, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is due to several factors, including the company's high debt and weak long-term fundamental strength. Over the past five years, the company's net sales have only grown at an annual rate of 1.54%, and it has a high debt to equity ratio of 4.59 times. Additionally, its return on equity is low at 3.50%, indicating low profitability per unit of shareholders' funds.
In the most recent quarter, the company's results were flat, with a decrease in profit before tax and operating income of 29.33% and 33.3%, respectively. Its cash and cash equivalents were also at a low of Rs 152.55 crore. Furthermore, 25.7% of the company's promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets.

On a positive note, the stock is currently in a mildly bullish range, and its MACD and KST technical factors are also bullish. It also has an attractive valuation with a ROCE of 19.3 and an enterprise value to capital employed ratio of 2.3. The stock is currently trading at a discount compared to its average historical valuations, and in the past year, it has generated a return of 27.60%, with profits rising by 56.3%. The PEG ratio of the company is also low at 0.3, indicating potential for future growth.

Overall, while Ramky Infrastructure may have some challenges to overcome, it also has some positive aspects that investors should consider before making any decisions. It is important to carefully analyze all factors and make an informed decision based on individual risk tolerance and investment goals.