Cranex Receives 'Sell' Rating from MarketsMOJO Due to High Debt and Weak Fundamentals

Cranex, an engineering company in the microcap industry, has recently received a 'Sell' rating from MarketsMOJO on November 12, 2024. This downgrade is due to several factors, including the company's high debt and weak long-term fundamental strength. Over the past 5 years, Cranex has only seen a 16.12% growth in net sales and a 12.65% growth in operating profit. Additionally, the company's debt to equity ratio is at a high average of 2.43 times, and its return on equity is only 8.45%, indicating low profitability per unit of shareholders' funds.
Furthermore, Cranex has an expensive valuation with a 3.3 enterprise value to capital employed and is currently trading at a discount compared to its historical valuations. Despite generating a 262.55% return in the past year, the company's profits have only increased by 96%, resulting in a PEG ratio of 0.4.

On a positive note, Cranex has declared positive results for the last 4 consecutive quarters, with net sales growing at 20.04% and a higher PAT of Rs 1.08 crore. The company's ROCE is also at its highest at 9.48%. Technically, the stock is in a mildly bullish range, with both the MACD and KST technical factors showing a bullish trend.

Cranex has also consistently outperformed the BSE 500 index in the last 3 annual periods, further highlighting its potential for growth. However, considering the current financial state of the company, MarketsMOJO has downgraded its stock call to 'Sell'. Investors are advised to carefully consider these factors before making any investment decisions.