Zuari Industries Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and High Debt

Zuari Industries, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 0.13%. Additionally, the company has shown poor long-term growth, with net sales growing at an annual rate of only 3.02% and operating profit at 30.05% over the last 5 years.
One of the major concerns for Zuari Industries is its low ability to service debt, with a high Debt to EBITDA ratio of 118.94 times. This could potentially lead to financial difficulties for the company in the future.

In the latest quarter, Zuari Industries reported a significant decline in profits, with a PAT(Q) of Rs -33.35 crore, a decrease of -23873.3% compared to the previous quarter.

On a positive note, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROCE of 0.4, the stock is considered to have a very attractive valuation, with an enterprise value to capital employed ratio of 0.5.

However, the stock is currently trading at a discount compared to its average historical valuations. Over the past year, while the stock has generated a return of 125.25%, its profits have only risen by 165.8%, resulting in a PEG ratio of 0.4.

It is worth noting that the majority shareholders of Zuari Industries are promoters, which could potentially impact the company's decision-making and performance.

Despite its market-beating performance in the last year, with a return of 125.25%, Zuari Industries' overall financial health and growth potential have raised concerns for investors. MarketsMOJO's 'Sell' rating serves as a cautionary signal for those considering investing in this microcap trading company.