Rupa & Company Downgraded to 'Sell' by MarketsMOJO Due to Poor Growth

Rupa & Company, a smallcap company in the lifestyle industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 12, 2024. This decision was based on the company's poor long-term growth, with net sales growing at a rate of only 0.78% and operating profit declining by -13.52% over the last 5 years.
The company's recent results for the quarter ending September 24 also showed a decline, with PBT LESS OI(Q) at Rs 19.82 crore falling by -15.44% and PAT(Q) at Rs 18.44 crore falling by -10.2%. Despite its small size, domestic mutual funds hold a mere 0% stake in the company, which could indicate their discomfort with the stock's price or the business itself.

In addition, Rupa & Company has consistently underperformed against the benchmark over the last 3 years, with a -6.06% return in the last 1 year and underperformance against BSE 500 in each of the last 3 annual periods.

However, the company does have a strong ability to service debt, with a low Debt to EBITDA ratio of 1.13 times. The technical trend for the stock is currently sideways, indicating no clear price momentum, and has generated -3.54% returns since the downgrade on November 12, 2024.

On a positive note, Rupa & Company has an attractive valuation with a price to book value of 2.1 and a ROE of 7.8. The stock is currently trading at a discount compared to its average historical valuations and has seen a rise in profits by 56.1% over the past year, resulting in a PEG ratio of 0.5.

Overall, while Rupa & Company may have some positive aspects, the recent downgrade by MarketsMOJO and the company's poor long-term growth may make it a risky investment option for potential buyers.