Shankar Lal Rampal Dye-Chem Downgraded to 'Sell' by MarketsMOJO, Stock in Mildly Bearish Range.

Shankar Lal Rampal Dye-Chem, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 10, 2024. The stock is currently in a Mildly Bearish range and has seen a decline in its technical trend since September 10, resulting in a -3.45% return. Multiple factors such as RSI, Bollinger Band, and OBV have contributed to this bearish trend.
One of the main reasons for the downgrade is the company's expensive valuation, with a price to book value of 7.3 and a ROE of 9.6. This is significantly higher than its average historical valuations. Additionally, while the stock has generated a return of 4.00% in the past year, its profits have only increased by 14.8%, resulting in a high PEG ratio of 5.1.

Another concerning factor is the low stake held by domestic mutual funds in the company, despite its small size. This could indicate that they are not comfortable with the current price or the business itself.

However, there are some positive aspects to consider. The company has a strong ability to service debt, with a low Debt to EBITDA ratio of 0.34 times. It also has a healthy long-term growth rate, with Net Sales growing at an annual rate of 17.89%.

In its latest financial results for June 2024, Shankar Lal Rampal Dye-Chem declared very positive results, with the highest Net Sales and PBDIT in the quarter at Rs 98.73 cr and Rs 4.81 cr respectively. The company also achieved its highest Operating Profit to Net Sales ratio at 4.87%.

Overall, while Shankar Lal Rampal Dye-Chem may have underperformed the market in the past year, it has shown potential for growth and has strong financials. However, investors should carefully consider the current bearish trend and the company's expensive valuation before making any investment decisions.