Ritesh International Downgraded to 'Sell' by MarketsMOJO, Concerns Over Weak Fundamentals and Debt Servicing Ability

Ritesh International, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 3rd, 2024. This decision was based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 9.52%. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 1.85.
In the past year, Ritesh International has underperformed the market, generating a return of only 0.08% compared to the market's return of 36.98% (BSE 500). However, the company did show positive results in the June 2024 quarter, with its net sales reaching a high of Rs 26.41 crore and its PBDIT at Rs 0.53 crore.

Technically, the stock is currently in a mildly bullish range, with its technical trend improving from mildly bearish on September 30th, 2024. It has generated a return of 3.29% since then, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

With an ROCE of 2.6, Ritesh International is currently fairly valued with a 1.5 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations. Despite its low returns in the past year, the company's profits have actually risen by 80%, resulting in a low PEG ratio of 0.2.

It is worth noting that the majority of Ritesh International's shareholders are non-institutional investors. This may indicate a lack of confidence in the company's performance and could be a contributing factor to its recent downgrade. Investors should carefully consider these factors before making any decisions regarding Ritesh International's stock.