Uma Exports Receives 'Sell' Rating from MarketsMOJO, Citing Weak Fundamentals and High Debt

Uma Exports, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO on September 16, 2024. This downgrade is based on the company's weak long-term fundamental strength, high debt to EBITDA ratio, and low profitability per unit of shareholders' funds.
Over the last 5 years, Uma Exports has seen a -29.52% CAGR growth in operating profits, indicating a decline in its financial performance. Additionally, the company's high debt to EBITDA ratio of 3.93 times raises concerns about its ability to service its debt. Furthermore, with a return on equity of only 9.39%, the company's profitability per unit of shareholders' funds is relatively low.

The stock is also trading at an expensive valuation with a 1.9 enterprise value to capital employed ratio and is currently at a discount compared to its average historical valuations. Despite generating a return of 178.44% in the past year, the company's profits have fallen by -33.5%.

On a positive note, Uma Exports has shown growth in its profits in the last quarter, with PBT LESS OI(Q) at Rs 6.17 crore, growing at 184.0%, and PAT(Q) at Rs 6.48 crore, growing at 147.6%. Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

Institutional investors have also shown an increasing interest in the company, with their stake increasing by 0.96% in the previous quarter. These investors have better resources and capabilities to analyze a company's fundamentals, making their participation a positive sign for Uma Exports.

Despite its market-beating performance in the last year, Uma Exports' recent downgrade to 'Sell' by MarketsMOJO highlights the company's weak long-term fundamentals and high debt. Investors should carefully consider these factors before making any investment decisions.