Craftsman Automation downgraded to 'Sell' by MarketsMOJO due to negative results and underperformance in market.

Craftsman Automation, a midcap engineering company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 13, 2024. This decision was based on the company's negative results in September 2024, with its ROCE (HY) at a low of 11.54% and PBDIT (Q) at Rs 192.78 crore. Additionally, the operating profit to net sales (Q) was also at its lowest at 15.88%.
The stock has also underperformed the market (BSE 500) in the last year, with negative returns of -2.30% compared to the market's 26.05% returns. However, the company has shown high management efficiency with a ROCE of 16.89% and has a healthy long-term growth rate with net sales growing at an annual rate of 31.30% and operating profit at 37.10%.

The technical trend for the stock is currently sideways, indicating no clear price momentum. This trend has worsened since November 13, 2024, when it was mildly bullish, resulting in -6% returns. However, with a ROCE of 12.5, the stock is currently trading at an attractive valuation with a 3 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

One positive aspect for the company is its high institutional holdings at 38.15%. These investors have better capability and resources to analyze the fundamentals of companies compared to most retail investors. Their stake in the company has also increased by 0.93% over the previous quarter.

In conclusion, while Craftsman Automation has shown strong management efficiency and long-term growth potential, its recent negative results and underperformance in the market have led to a 'Sell' rating by MarketsMOJO. The stock's technical trend is also currently sideways, and it is trading at a discount compared to its historical valuations. However, the high institutional holdings in the company may indicate potential for future growth.