Shri Venkatesh Refineries Downgraded to 'Sell' by MarketsMOJO: Weak Fundamentals and High Debt Raise Concerns

Shri Venkatesh Refineries, a microcap company in the refined oil and vanaspati industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 21, 2024. This decision was based on several factors, including weak long-term fundamental strength and a high debt to EBITDA ratio.
Over the last 5 years, the company has seen a -8.15% CAGR growth in net sales, indicating a decline in its overall performance. Additionally, its ability to service debt is low, with a debt to EBITDA ratio of 2.65 times. These factors suggest that the company may struggle to maintain financial stability in the long run.

In terms of technical analysis, the stock is currently in a mildly bullish range. However, both the Bollinger Band and DOW technical factors are also bullish, indicating some potential for growth.

With a ROCE of 14, the company has a fair valuation and a 2 Enterprise value to Capital Employed. It is also currently trading at a discount compared to its average historical valuations. However, despite a 24.6% increase in profits over the past year, the PEG ratio of the company is 0.8, suggesting that it may be overvalued.

Despite its recent downgrade, Shri Venkatesh Refineries has shown market-beating performance with a return of 85.36% in the last year, significantly higher than the market (BSE 500) returns of 38.03%. However, it is important to consider the company's weak fundamentals and high debt before making any investment decisions.