Surat Trade & Merchantile Downgraded to 'Sell' by MarketsMOJO, Poor Long-Term Growth and High Risk Factors

Surat Trade & Merchantile, a microcap company in the textile industry, has recently been downgraded to a 'Sell' by MarketsMOJO on February 12, 2024. This decision was based on the company's poor long-term growth, with net sales declining at an annual rate of -24.55% and operating profit at -188.22% over the last 5 years.
In addition, the company's results for September 2023 showed a decline in profits, with PAT (HY) at Rs 4.59 crore, a decrease of -92.57% compared to the previous year. Furthermore, the non-operating income for the quarter was 169.14% of the profit before tax (PBT), indicating a potential risk for investors.

One of the major concerns for Surat Trade & Merchantile is its negative EBITDA, making it a risky stock to invest in. This is further supported by the fact that the stock is currently trading at a higher risk level compared to its historical valuations. Despite generating a return of 35.52% in the past year, the company's profits have declined by -89.3%.

On a positive note, Surat Trade & Merchantile has a low debt to equity ratio, which is a good sign for investors. The stock is also technically in a mildly bullish range, with its MACD and KST technical factors showing a bullish trend.

It is worth noting that the majority shareholders of the company are promoters, which could potentially impact the decision-making process and overall performance of the company.

Despite its recent downgrade, Surat Trade & Merchantile has shown market-beating performance in the long term as well as the near term. In the last 1 year, the stock has generated a return of 35.52% and has outperformed BSE 500 in the last 3 years, 1 year, and 3 months. However, investors should carefully consider the company's financial performance and risk factors before making any investment decisions.