S.A.L Steel downgraded to 'Sell' by MarketsMOJO due to high debt and weak growth

S.A.L Steel, a microcap company in the iron and steel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 22, 2024. This decision was based on several factors, including the company's high debt and weak long-term fundamental strength.
Over the last five years, S.A.L Steel has only seen a minimal annual growth rate of 0.14% in net sales, indicating poor long-term growth. Additionally, the company has a high debt to equity ratio of 6.72 times, which can be a cause for concern for investors.

Furthermore, 45.39% of the company's promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets. On the positive side, S.A.L Steel has shown a high operating profit to interest ratio and PBDIT, indicating strong operational performance.

Technically, the stock is currently in a mildly bullish range, with its MACD and OBV technical factors also showing a bullish trend. However, with a ROCE of only 8, the stock is fairly valued with an enterprise value to capital employed ratio of 1.8.

Despite the recent return of 28.31%, the company's profits have fallen by -87% over the past year. This, combined with the company's high debt and weak long-term growth, has led to the 'Sell' rating by MarketsMOJO. Investors should carefully consider these factors before making any investment decisions regarding S.A.L Steel.