Suryalakshmi Cotton Mills Downgraded to 'Sell'

Suryalakshmi Cotton Mills, a microcap textile company, has recently been downgraded to a 'Sell' by MarketsMOJO on December 4th, 2023. This decision was based on weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 5.79%, poor long-term growth in net sales and operating profit, and a high debt to EBITDA ratio of 6.13 times.
In the latest quarter, the company's profits have fallen by 82.99% and net sales have decreased by 7.4%. Additionally, 50.65% of the promoter shares are pledged, which can put downward pressure on the stock prices in falling markets.

However, there are some positive technical factors to consider. The stock is currently in a bullish range and has shown improvement since December 6th, 2023, generating a return of -2.22%. The MACD and OBV technical factors are also bullish.

Furthermore, the company has an attractive valuation with an ROCE of 10.1 and a low enterprise value to capital employed ratio of 0.7. The stock is currently trading at a discount compared to its historical valuations and has shown a return of 15.84% in the past year, with profits increasing by 320.7%. The PEG ratio of the company is also at a low 0.1.

Overall, while Suryalakshmi Cotton Mills may not be performing well in the long-term, there are some positive technical and valuation factors to consider before making any investment decisions.