Smruthi Organics Receives 'Sell' Rating from MarketsMOJO Due to Flat Results and Low Debtors Turnover Ratio

Smruthi Organics, a microcap pharmaceutical company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's flat results in March 2024, with a decrease of -65.33% in profits compared to the previous year. Additionally, the company's debtors turnover ratio for the first half of the year is at its lowest at 3.11 times.
Technically, the stock is currently in a Mildly Bearish range, with the technical trend deteriorating from Mildly Bullish on June 21, 2024. In the past year, Smruthi Organics has underperformed the market, generating a return of 24.15% compared to the market's return of 36.15%.

However, the company does have some positive factors, such as a high management efficiency with a ROE of 17.72%. It also has a strong ability to service debt with a low Debt to EBITDA ratio of 0.58 times. In terms of valuation, Smruthi Organics has a fair ROCE of 7.8 and a 2.4 Enterprise value to Capital Employed.

Despite these positive factors, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 24.15%, its profits have fallen by -11.4%. It is important to note that the majority shareholders of Smruthi Organics are the promoters themselves.

Based on these factors, MarketsMOJO has downgraded the stock to 'Sell'. Investors should carefully consider these factors before making any investment decisions.