Real Touch Finance Receives 'Sell' Rating from MarketsMOJO, Declining Profits Raise Concerns for Investors

Real Touch Finance, a microcap finance company, has recently received a 'Sell' rating from MarketsMOJO on October 8, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average return on equity (ROE) of 4.34%. Additionally, the stock is currently trading at a premium compared to its historical valuations, with a price to book value of 2.3.
Despite generating a return of 134.60% in the past year, the company's profits have fallen by -12.1%. This could be a cause for concern for investors, as it indicates a potential decline in future earnings. However, Real Touch Finance has declared positive results for the last 7 consecutive quarters, with a net sales growth of 23.10% and a PBDIT (profit before depreciation, interest, and taxes) of Rs 4.80 crore, the highest in its category.

From a technical standpoint, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. The majority shareholders of Real Touch Finance are its promoters, which could provide some stability to the stock.

In the past 3 years, Real Touch Finance has consistently generated returns for its investors, outperforming the BSE 500 index in each of the last 3 annual periods. However, with the recent downgrade by MarketsMOJO and the company's declining profits, it may be wise for investors to approach this stock with caution.