Texmaco Rail & Engineering Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals

Texmaco Rail & Engineering, a midcap company in the railway industry, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors that indicate a 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 4.31 times. This indicates that the company may struggle to meet its financial obligations in the future. Additionally, Texmaco Rail & Engineering has shown a -5.93% CAGR growth in Operating Profits over the last 5 years, further highlighting its weak financial performance.

Furthermore, the company's Return on Equity (avg) of 3.91% is significantly lower than the industry average, indicating low profitability per unit of shareholders' funds. With a ROE of 4.5, the stock is also considered to be expensive, with a Price to Book Value of 3.1.

Institutional investors have also decreased their stake in the company, with a -1.32% decrease over the previous quarter. This suggests that these investors, who have better resources to analyze company fundamentals, have lost confidence in Texmaco Rail & Engineering.

On the positive side, the company has declared positive results for the last 7 consecutive quarters, with a growth in Net Profit of 242.62% in Jun 24. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

Despite generating consistent returns over the last 3 years and outperforming BSE 500, the recent downgrade by MarketsMOJO suggests that investors should approach Texmaco Rail & Engineering with caution. With a PEG ratio of 0.7 and a deteriorating technical trend, it may be wise to wait for further improvements in the company's financial performance before considering investing in this midcap railway company.