Atul Auto Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Low Profitability

Atul Auto, a smallcap company in the auto industry, has recently received a 'Sell' rating from MarketsMOJO on August 1, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a -31.57% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low profitability per unit of shareholders' funds, with a Return on Equity (avg) of 4.63%.
Despite declaring positive results for the last 3 consecutive quarters, with a higher PAT (HY) of Rs 10.41 crore and the highest net sales (Q) of Rs 160.14 crore, Atul Auto's stock is currently in a mildly bullish range. Its MACD and KST technical factors are also showing bullish signals.

In terms of valuation, the company has a fair ROCE of 4.2 and is trading at a discount compared to its average historical valuations. However, over the past year, while the stock has generated a return of 90.55%, its profits have only risen by 129.3%, resulting in a PEG ratio of 2.7.

Despite its market-beating performance in the long term, with a return of 90.55% in the last 1 year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months, MarketsMOJO has downgraded Atul Auto to a 'Sell' due to its weak fundamental strength and low profitability. Investors are advised to carefully consider these factors before making any investment decisions.