Bhagwati Autocast Downgraded to 'Sell' by MarketsMOJO Due to Technical Deterioration and Underperformance in Market

Bhagwati Autocast, a microcap company in the castings and forgings industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 9, 2024. This is due to the stock being in a Mildly Bearish range and its technical trend deteriorating from Sideways on July 5, 2024. Since then, the stock has generated a negative return of -2.25%. Additionally, factors such as MACD, KST, and DOW also indicate a Mildly Bearish outlook for the stock.
In the past year, Bhagwati Autocast has underperformed the market, with a return of only 16.21% compared to the market's (BSE 500) return of 38.60%. However, the company has a strong ability to service debt with a low Debt to EBITDA ratio of 1.45 times. It also has a healthy long-term growth rate, with an annual growth rate of 40.35% in operating profit.

The company's PBDIT(Q) is at its highest at Rs 4.66 crore, while its OPERATING PROFIT TO NET SALES(Q) and PBT LESS OI(Q) are also at their highest at 14.47% and Rs 3.78 crore, respectively. With a ROCE of 28.3, the stock is currently trading at an attractive valuation with a 3.3 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

However, despite these positive factors, the stock's profits have fallen by -10.2% in the past year. The majority shareholders of Bhagwati Autocast are the promoters, which may also be a cause for concern for potential investors. Overall, MarketsMOJO's downgrade to 'Sell' for Bhagwati Autocast is based on factual data and technical analysis, and it is recommended to approach the stock with caution.