Soma Textiles & Industries Receives 'Sell' Rating from MarketsMOJO, Indicating Negative Outlook

Soma Textiles & Industries, a microcap textile company, has recently received a 'Sell' rating from MarketsMOJO on November 4th, 2024. This downgrade is based on several factors that indicate a negative outlook for the company.
One of the main reasons for the 'Sell' rating is the company's high debt to EBITDA ratio of -1.00 times, which indicates a low ability to service its debt. Additionally, the company has reported losses and negative return on capital employed (ROCE), further highlighting its financial struggles.

Moreover, Soma Textiles & Industries has shown poor long-term growth with a decline in net sales by an annual rate of -29.06% and a low operating profit of 7.98% over the last 5 years. In the latest quarter, the company's profits have also decreased significantly, with PAT(9M) at Rs 2.74 crore, a -97.85% decrease, and PBDIT(Q) and PBT LESS OI(Q) at their lowest at Rs -1.14 crore and Rs -1.28 crore respectively.

The stock is also considered risky due to its negative EBITDA and trading at a higher valuation compared to its historical average. While the stock has generated a return of 130.81% in the past year, its profits have declined by -98.1%.

On the technical front, the stock is currently in a mildly bullish range and has shown bullish indicators such as MACD, Bollinger Band, and KST. However, the majority of the company's shares are held by promoters, which may not be a positive sign for potential investors.

Despite its recent market-beating performance, Soma Textiles & Industries' overall outlook is not favorable. It is recommended to approach this stock with caution and consider other investment options.