Suratwwala Business Group Downgraded to 'Sell' by MarketsMOJO Amidst Negative Results

Suratwwala Business Group, a smallcap company in the construction and real estate industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 25, 2024. This decision was based on the company's negative results in the quarter ending June 2024, with a significant decrease in net sales, PAT, and PBDIT.
The company's ROCE of 43.5 indicates a very expensive valuation, with an enterprise value to capital employed ratio of 23.3. Additionally, while the stock has seen a return of 246.07% in the past year, its profits have only increased by 31%, resulting in a PEG ratio of 2.7.

It is worth noting that despite its size, domestic mutual funds hold a mere 0% stake in the company. This could suggest that they are either not comfortable with the current price or have concerns about the business.

However, there are some positive factors to consider. Suratwwala Business Group has a low debt to EBITDA ratio of 0.54, indicating a strong ability to service debt. The company has also shown healthy long-term growth, with net sales and operating profit growing at annual rates of 60.90% and 88.20%, respectively.

From a technical standpoint, the stock is currently in a mildly bullish range, with multiple indicators such as MACD, Bollinger Band, KST, DOW, and OBV pointing towards a bullish trend.

In the past three years, Suratwwala Business Group has consistently outperformed the BSE 500 index, generating returns of 246.07% in the last year alone. However, with the recent downgrade by MarketsMOJO and the concerns raised by the low stake held by domestic mutual funds, investors may want to carefully consider their options before investing in this smallcap company.