Shangar Decor Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Shangar Decor, a microcap company in the miscellaneous industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 29, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 2.40%, poor long-term growth in net sales and operating profit, and a weak ability to service its debt with a low EBIT to Interest ratio.
Additionally, the stock is currently trading at a discount compared to its historical valuations, with a very expensive valuation of 4.3 Enterprise value to Capital Employed. While the stock has generated a return of 1.97% in the past year, its profits have only risen by 132%, underperforming the market (BSE 500) returns of 35.31%.

On the positive side, the company has declared very positive results for the last three consecutive quarters, with a growth in net profit of 1850%. Its net sales have also grown at a rate of 139.37% and its ROCE is at its highest at 12.41%. However, the majority shareholders of Shangar Decor are non-institutional investors.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, KST, and OBV indicating a bullish trend. Overall, while the company has shown positive results in the recent past, its weak long-term fundamentals and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.