Sahyadri Industries Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth and Negative Results

Sahyadri Industries, a microcap company in the construction material industry, has recently been downgraded to a 'Sell' by MarketsMOJO on June 21, 2024. This decision was based on the company's poor long-term growth, as its operating profit has declined by an annual rate of -1.11% over the last 5 years. Additionally, the company has declared negative results for the last 10 consecutive quarters, with a decrease in PBT LESS OI(Q) by -23.39% and an increase in INTEREST(HY) by 21.81%. Furthermore, its NET SALES(Q) has also decreased by -7.83%.
In comparison to the market (BSE 500) returns of 36.15%, Sahyadri Industries has underperformed in the last 1 year with a return of only 9.37%. However, the company has a strong ability to service debt with a low Debt to EBITDA ratio of 0.61 times. The technical trend for the stock is currently sideways, indicating no clear price momentum. The stock has also generated a return of 2.87% since the technical trend deteriorated from Mildly Bullish on June 21, 2024.

Despite its recent downgrade, Sahyadri Industries has an attractive valuation with a ROCE of 9.3 and an Enterprise value to Capital Employed ratio of 1.2. The stock is currently trading at a discount compared to its average historical valuations. However, it is important to note that while the stock has generated a return of 9.37% in the past year, its profits have fallen by -29%.

The majority shareholders of Sahyadri Industries are its promoters, indicating their confidence in the company's future prospects. With a focus on improving its long-term growth and addressing its negative results, the company may be able to turn its performance around in the future. However, for now, MarketsMOJO has deemed it a 'Sell' based on its current financial standing.