Southern Petrochemical Industries Corporation Downgraded to 'Sell' by MarketsMOJO

Southern Petrochemical Industries Corporation, a smallcap company in the fertilizer industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 1, 2024. This downgrade is due to the company's negative financial performance in the last quarter, with a significant decrease in operating profit and net sales. In fact, the company has declared negative results for the past three consecutive quarters.
One of the main reasons for this downgrade is the company's low operating profit to interest ratio, which is currently at its lowest at 1.30 times. This indicates that the company may struggle to meet its financial obligations in the future. Additionally, the company's net sales have also been at their lowest at Rs 124.88 crore.

Despite being a smallcap company, Southern Petrochemical Industries Corporation has not attracted much interest from domestic mutual funds, with only 0.01% of the company's shares being held by them. This could be a sign that these funds are not comfortable with the company's current stock price or its business.

Furthermore, the stock has underperformed the market in the last year, with a return of only 26.54%, compared to the market's return of 37.25%. However, the company does have some positive factors, such as a low debt to EBITDA ratio and a healthy long-term growth rate of 46.36% in operating profit.

Technically, the stock is currently in a mildly bullish range, with multiple indicators such as MACD, Bollinger Band, and KST showing bullish signals. However, with a ROCE of 15.7, the stock is currently fairly valued with an enterprise value to capital employed ratio of 1.5.

In conclusion, while Southern Petrochemical Industries Corporation may have some positive aspects, its recent downgrade to a 'Sell' by MarketsMOJO and its underperformance in the market raise concerns about its future potential. Investors should carefully consider these factors before making any investment decisions.