Galaxy Surfactants Receives 'Sell' Rating from MarketsMOJO Due to Poor Long-Term Growth and Underperformance Against Benchmark

Galaxy Surfactants, a midcap chemical company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on the company's poor long-term growth, with net sales growing at an annual rate of 6.55% and operating profit at 15.16% over the last 5 years. In addition, the company's recent financial results for March 2024 have been negative, with the lowest ROCE (HY) at 16.81%, lowest operating profit to net sales (Q) at 10.94%, and a fall in PAT (Q) at Rs 77.50 crore by -14.4%.
Furthermore, Galaxy Surfactants has consistently underperformed against the benchmark over the last 3 years, with -9.09% returns in the last 1 year and underperformance against BSE 500 in each of the last 3 annual periods. However, the company does have a high management efficiency with a ROE of 20.70% and a strong ability to service debt with a low debt to EBITDA ratio of 0.54 times.

In terms of technical trends, the stock is currently sideways with no clear price momentum. The technical trend has deteriorated from mildly bullish on 18-Jun-24 and has generated -1.35% returns since then. With a ROE of 13.8, the stock is fairly valued with a price to book value of 4.3. It is also trading at a discount compared to its average historical valuations.

It is worth noting that while the stock has generated a return of -9.09% in the past year, its profits have fallen by -20.9%. The majority shareholders of Galaxy Surfactants are the promoters, indicating their confidence in the company's future prospects. Overall, MarketsMOJO's 'Sell' rating on Galaxy Surfactants is based on the company's recent financial performance and underperformance against the benchmark, but it is important to consider all factors before making any investment decisions.