Brijlaxmi Leasing & Finance downgraded to 'Sell' due to weak fundamentals and overvaluation concerns

Brijlaxmi Leasing & Finance, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 2.14%. In the last quarter, the company's PBDIT(Q) was at its lowest at Rs 0.18 crore, while PBT LESS OI(Q) was at Rs -0.15 crore and EPS(Q) at Rs -0.03.
Other factors contributing to the 'Sell' rating include the stock being in a mildly bullish range and multiple bullish indicators such as MACD, Bollinger Band, and KST. However, with an ROE of 17.8, the stock is fairly valued with a price to book value of 1.3. It is also currently trading at a discount compared to its historical valuations.

Despite generating a return of 101.93% in the past year, the company's profits have only risen by 64%, resulting in a PEG ratio of 0. This indicates that the stock may be overvalued. Additionally, the majority of shareholders are non-institutional investors.

On a positive note, Brijlaxmi Leasing & Finance has consistently generated returns over the last 3 years and has outperformed the BSE 500 index in each of the last 3 annual periods. However, considering the current weak fundamental strength and overvaluation concerns, investors may want to approach this stock with caution.