Shankara Building Products Downgraded to 'Sell' by MarketsMOJO Due to Poor Growth and Bearish Trend

Shankara Building Products, a smallcap company in the construction material industry, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-05-29. This decision was based on several factors, including poor long-term growth and a bearish technical trend.
Over the last 5 years, the company's operating profit has only grown at an annual rate of -8.99%, indicating a lack of long-term growth potential. Additionally, the stock is currently in a bearish range and has been classified as 'Mildly Bearish' as of 29-May-24. This is due to multiple factors such as RSI, MACD, Bollinger Band, and KST all showing bearish signals.

In terms of performance, Shankara Building Products has underperformed the BSE 500 index in the last 3 years, 1 year, and 3 months, with a return of -4.61%. However, the company has declared positive results for the last 9 consecutive quarters, with a PAT (HY) growth of 28.53% and a highest ROCE (HY) of 15.88%. Its inventory turnover ratio is also at a high of 9.96 times.

Despite these positive financial indicators, the stock is currently trading at a discount compared to its historical valuations, with a ROE of 10.2 and a price to book value of 2. This makes it a very attractive valuation for potential investors. However, it is important to note that the majority shareholders of Shankara Building Products are promoters.

In conclusion, while the company has shown strong financial performance in recent quarters, the overall outlook for Shankara Building Products is currently bearish. Investors should carefully consider all factors before making any investment decisions.