West Coast Paper Mills Downgraded to 'Sell' by MarketsMOJO, Negative Results in December 2023

West Coast Paper Mills, a smallcap company in the paper and paper products industry, has recently been downgraded to a 'Sell' by MarketsMOJO on April 15, 2024. This decision was based on the company's negative results in December 2023, with a significant decrease in PAT(Q) at Rs 135.93 crore, a -45.0% fall. Additionally, the company's operating profit to net sales(Q) was at its lowest at 20.82%, and net sales(Q) also saw a decline at Rs 1,045.13 crore.
Technically, the stock is currently in a bearish range, with a deteriorating trend since April 15, 2024, resulting in a -2.15% return. Multiple factors, such as MACD, Bollinger Band, and KST, also indicate a bearish trend for the stock.

In the last year, West Coast Paper Mills has underperformed the market, with a return of only 6.44%, compared to the market's (BSE 500) return of 36.05%. However, the company has shown high management efficiency, with a ROE of 21.66%, and a strong ability to service debt, with a low debt to EBITDA ratio of 0.57 times.

The company also has a healthy long-term growth potential, with an annual growth rate of 19.37% in net sales and 44.30% in operating profit. With a ROE of 33.4, the stock is currently trading at an attractive valuation, with a price to book value of 1.3. It is also trading at a fair value compared to its average historical valuations. In the past year, while the stock has generated a return of 6.44%, its profits have risen by 9.3%, resulting in a PEG ratio of 0.5.

West Coast Paper Mills is majority owned by its promoters and has a market cap of Rs 4,069 crore, making it the second largest company in the sector, behind JK Paper. Its annual sales of Rs 4,735.07 crore also account for 16.32% of the industry. While the company has shown potential for growth and has strong management efficiency, the recent downgrade by MarketsMOJO suggests caution for potential investors.