D & H India Downgraded to 'Sell' by MarketsMOJO, But Shows Positive Growth and Potential

D & H India, a microcap company in the electrodes and welding equipment industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 11, 2024. This decision was based on the company's weak long-term fundamental strength, with an average Return on Capital Employed (ROCE) of 5.82%. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 1.68.
However, there are some positive factors to note. In the first half of 2024, D & H India saw a growth in net sales of 24.71%, reaching Rs 90.65 crore. The company also has a high inventory turnover ratio of 7.49 times, indicating efficient management of inventory.

From a technical standpoint, the stock is currently in a mildly bullish range. Multiple factors, such as MACD, KST, and OBV, suggest a bullish trend for the stock.

In terms of valuation, D & H India has a fair ROCE of 8.7 and an enterprise value to capital employed ratio of 1.9. The stock is also trading at a discount compared to its average historical valuations.

While the stock has generated a return of 116.72% in the past year, its profits have fallen by -20.2%. The majority shareholders of D & H India are the promoters, indicating their confidence in the company.

Moreover, D & H India has consistently outperformed the BSE 500 index in the last three annual periods, showcasing its ability to generate consistent returns. Overall, while there are some concerns about the company's financial strength, it has shown positive growth and has the potential to continue performing well in the future.