Super Tannery Receives 'Sell' Rating from MarketsMOJO, Weak Fundamentals Raise Concerns

Super Tannery, a microcap company in the leather industry, has recently received a 'Sell' rating from MarketsMOJO on November 13, 2024. This downgrade is based on several factors that indicate weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the company's low ability to service debt, with a high Debt to EBITDA ratio of 4.22 times. This means that the company may struggle to make payments on its debt, which can negatively impact its financial stability.

Additionally, Super Tannery has shown a -1.13% CAGR growth in operating profits over the last 5 years, indicating a lack of growth and potential financial struggles. The company has also only been able to generate a low Return on Equity (avg) of 5.75%, which suggests low profitability per unit of shareholders' funds.

In terms of recent performance, the company's results for June 2024 were flat, and its interest expenses have grown by 55.21%. Furthermore, 51.12% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets.

On a more positive note, Super Tannery's stock is currently in a mildly bullish range, and its MACD and KST technical factors are also bullish. It also has an attractive valuation with a ROCE of 6.5 and a 1.3 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, Super Tannery's stock has generated a return of 42.56%, but its profits have only risen by 6.5%. This results in a PEG ratio of 3.3, which may indicate that the stock is overvalued. Additionally, the company has consistently outperformed the BSE 500 index in the last 3 annual periods.

In conclusion, while Super Tannery may have some positive aspects, the recent 'Sell' rating from MarketsMOJO and the company's weak long-term fundamental strength suggest caution for potential investors. It is important to carefully consider all factors before making any investment decisions.