Shri Keshav Cements & Infra Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Weak Fundamentals

Shri Keshav Cements & Infra, a microcap company in the cement industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 13, 2024. This decision was based on the company's high debt and weak long-term fundamental strength. With a debt to equity ratio of 0 times, the company's profitability per unit of total capital is low, with a return on capital employed of 8.70%.
Additionally, the company's valuation is considered very expensive with an enterprise value to capital employed ratio of 2.1. However, the stock is currently trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 78.85%, while its profits have risen by 296.9%. This results in a PEG ratio of 0.2, indicating a potential overvaluation.

On a positive note, Shri Keshav Cements & Infra has declared positive results for the last two consecutive quarters, with a growth in operating profit of 33.87% in March 2024. The company also has a low debt-equity ratio of 1.88 times and a high operating profit to interest ratio of 2.83 times. It also has a strong cash position with cash and cash equivalents of Rs 14.39 crore.

From a technical standpoint, the stock is currently in a mildly bullish range, with an improved trend from sideways on August 12, 2024. Multiple technical indicators such as MACD, Bollinger Band, KST, and OBV are also showing bullish signals.

The majority shareholders of Shri Keshav Cements & Infra are the promoters, indicating their confidence in the company's future prospects. The stock has also outperformed the BSE 500 index in the long term as well as the near term, with a market-beating performance. While the stock may have generated significant returns in the past year, investors should carefully consider the company's high debt and weak fundamentals before making any investment decisions.