Shyam Century Ferrous downgraded to 'Sell'

Shyam Century Ferrous ., a microcap company in the ferrous metal industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 6, 2023. This decision was based on the company's poor long-term growth, with net sales growing at an annual rate of only 4.64% and operating profit at 12.84% over the last 5 years.
In addition, the company has declared negative results for the last 6 consecutive quarters, with a significant fall in net sales of -31.78% in September 2023. This trend continued in June 2022, after 9 consecutive negative quarters. The company's profits have also taken a hit, with PAT(Q) falling by -116.1% and NET SALES(Q) at its lowest at Rs 26.57 cr.

Furthermore, Shyam Century Ferrous . has underperformed the market in the last 1 year, with negative returns of -5.85% compared to the market's 16.72% returns. The company's low debt to equity ratio and mildly bullish technical trend may seem like positive factors, but it is important to note that the stock is trading at a premium compared to its historical valuations.

Despite having a ROE of 8.9 and an attractive valuation with a 2.7 price to book value, the stock's profits have fallen by -71.3% in the past year. It is also worth mentioning that the majority shareholders of the company are the promoters themselves.

In conclusion, while Shyam Century Ferrous . may seem like an attractive investment due to its low debt and technical trend, the company's poor long-term growth and negative financial results make it a risky choice for investors. MarketsMOJO's downgrade to 'Sell' serves as a cautionary warning for potential investors.