Freshtrop Fruits Downgraded to 'Sell' by MarketsMOJO, Poor Long-Term Growth and Flat Financial Results Raise Concerns

Freshtrop Fruits, a microcap company in the FMCG industry, has recently been downgraded to a 'Sell' by MarketsMOJO on January 10, 2024. This decision was based on the company's poor long-term growth, with an annual rate of -2.80% in operating profit over the last 5 years.
In addition, the company's recent financial results for September 2023 have been flat, with a decrease in PBT and PAT by -112.9% and -101.2% respectively. The net sales for the quarter were also at a low of Rs 20.48 crore. These factors have contributed to the stock being in a mildly bearish range, with a deteriorating technical trend and bearish MACD and KST technical factors.

Furthermore, the stock is currently trading at a discount compared to its average historical valuations, despite generating a return of 69.55% in the past year. However, the company's ROE of 22.9 indicates an expensive valuation with a 1.7 price to book value. The PEG ratio of the company is also at 0, suggesting that the stock may not have much future potential.

On a positive note, Freshtrop Fruits has a strong ability to service debt with a low debt to EBITDA ratio of 1.42 times. The majority shareholders of the company are the promoters, indicating their confidence in the company's performance.

Overall, while the stock has outperformed the market (BSE 500) with a return of 69.55% in the last year, its profits have only risen by 1101.1%. This raises concerns about the company's future growth potential. Investors are advised to carefully consider these factors before making any investment decisions.