Barak Valley Cements Receives 'Sell' Rating from MarketsMOJO Due to Weak Long-Term Performance

Barak Valley Cements, a microcap company in the cement industry, has recently received a 'Sell' rating from MarketsMOJO on March 7, 2024. This downgrade is based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 7.33%, poor long-term growth with a negative annual growth rate of -4.07% in Net Sales and only 13.99% in Operating Profit over the last 5 years, and a high Debt to EBITDA ratio of 4.10 times, indicating a low ability to service debt.
Despite declaring positive results for the last 3 consecutive quarters, with a growth of 105.58% in PAT (HY) and 32.48% in NET SALES (HY), the stock is still considered a 'Sell' due to its weak long-term performance. However, it is worth noting that the company has the highest Operating Profit to Interest (Q) ratio at 3.86 times.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, KST, and DOW indicating a bullish trend. With a ROCE of 10.8, the stock is fairly valued with a 1.1 Enterprise value to Capital Employed. Additionally, it is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 117.05%, while its profits have risen by 68.4%, resulting in a low PEG ratio of 0.2.

The majority shareholders of Barak Valley Cements are the promoters, indicating their confidence in the company. The stock has also consistently outperformed BSE 500 in the last 3 annual periods, further showcasing its potential for growth. However, based on the current data and performance, MarketsMOJO has downgraded the stock to 'Sell'.