RattanIndia Enterprises Downgraded to 'Sell' by MarketsMOJO: What Investors Need to Know

RattanIndia Enterprises, a midcap company in the miscellaneous industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This is due to several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 0%, poor long-term growth with an annual operating profit growth rate of -787.68% over the last 5 years, and a high Debt to EBITDA ratio of -1.00 times, indicating a low ability to service debt.
The company also has an expensive valuation with a ROCE of -2.5 and a 6.3 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 24.48%, while its profits have risen by 941.7%, resulting in a PEG ratio of 0.

One concerning factor is that despite its size, domestic mutual funds hold only 0.26% of the company. This could indicate that they are not comfortable with the current price or the business itself.

On a positive note, RattanIndia Enterprises declared outstanding results in June 2024 with a growth in operating profit of 401.9%. The company has also reported positive results for the last 4 consecutive quarters. Additionally, it has a high DEBTORS TURNOVER RATIO(HY) of 126.03 times, OPERATING PROFIT TO INTEREST(Q) of 39.87 times, and CASH AND CASH EQUIVALENTS(HY) of Rs 164.53 crore.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated from Mildly Bullish on 11-Sep-24 and has generated -0.95% returns since then.

In conclusion, while RattanIndia Enterprises may have some positive aspects, the overall outlook for the company is not favorable. With a 'Sell' rating from MarketsMOJO and several concerning factors, investors may want to approach this stock with caution.