IFB Agro Industries Downgraded to 'Sell' by MarketsMOJO: Poor Growth and Negative EBITDA Raise Concerns.

IFB Agro Industries, a microcap company in the breweries and distilleries industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 19, 2024. This decision was based on the company's poor long-term growth, flat results in June 2024, and negative EBITDA.
According to MarketsMOJO, IFB Agro Industries has shown a slow growth rate in net sales, with an annual rate of only 1.62% over the last 5 years. Additionally, the company's operating profit has only grown at a rate of 19.88% during the same time period. In the most recent financial year, the company's operating cash flow was at its lowest at Rs -31.60 crore, and its profit after tax has decreased by -54.31%. The return on capital employed (ROCE) was also at its lowest at -2.37%.

One of the major concerns for the company is its negative EBITDA, which indicates that it is not generating enough earnings to cover its operating expenses. This makes the stock a risky investment, especially when compared to its historical valuations. In the past year, while the stock has generated a return of 8.21%, its profits have fallen by -104.5%.

Another factor to consider is the low stake held by domestic mutual funds in the company, at only 0.02%. This could suggest that they are not comfortable with the current stock price or the business itself. As mutual funds have the capability to conduct in-depth research on companies, their lack of interest in IFB Agro Industries may be a cause for concern.

In the last year, the stock has underperformed the market, with a return of only 8.21% compared to the market's return of 34.74% (BSE 500). However, the company does have a low debt to equity ratio, which is a positive sign for investors.

From a technical standpoint, the stock is currently in a mildly bullish range, with both the MACD and KST technical factors showing a bullish trend. However, investors should still approach with caution due to the company's overall poor performance and negative EBITDA.