Thirumalai Chemicals Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth and Risky Valuation

Thirumalai Chemicals, a smallcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on 2024-09-23. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of -12.95% over the last 5 years. In addition, the company's results for June 2024 were flat, with the lowest ROCE (HY) at 0.30% and the highest DEBT-EQUITY RATIO (HY) at 1.09 times. The DPR (Y) was also at its lowest at -26.40%, indicating negative operating profits.
One of the main reasons for the downgrade is the stock's risky nature, as it is currently trading at a higher valuation compared to its historical average. Despite generating a return of 54.75% in the past year, the company's profits have fallen by -209.7%. This raises concerns about the sustainability of the stock's performance.

On the other hand, Thirumalai Chemicals does have a low Debt to Equity ratio (avg) at 0 times, which is a positive factor. The stock is also technically in a Mildly Bullish range, with indicators such as MACD, Bollinger Band, KST, and OBV all showing bullish signals.

Another positive aspect is the increasing participation of institutional investors in the company. These investors have recently increased their stake by 0.74% and collectively hold 2.79% of the company. This indicates that they have better resources and capabilities to analyze the company's fundamentals compared to retail investors.

Despite the recent downgrade, Thirumalai Chemicals has shown market-beating performance, with a return of 54.75% in the last year, outperforming the market (BSE 500) returns of 40.49%. However, investors should carefully consider the company's long-term growth and profitability before making any investment decisions.