India Gelatine & Chemicals Downgraded to 'Sell' by MarketsMOJO Due to Negative Results and Technical Factors

India Gelatine & Chemicals, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 28, 2024. This decision was based on the company's negative results in June 2024, with a decline of -48.01% in its PAT (HY) at Rs 10.06 crore and the lowest PBDIT (Q) at Rs 5.84 crore. Additionally, the operating profit to net sales (Q) was also at its lowest at 11.66%.
Technically, the stock is currently in a mildly bearish range and the technical trend has deteriorated from mildly bullish on August 28, 2024. The MACD and KST technical factors are also bearish, indicating a negative outlook for the stock.

In the past year, India Gelatine & Chemicals has underperformed the market (BSE 500) with a negative return of -3.06%, while the market has generated a return of 39.22%. This underperformance can be attributed to the company's falling profits, which have declined by -24.7% in the past year.

However, the company has a low debt to equity ratio (avg) of 0 times and has shown healthy long-term growth with an annual rate of 80.73% in its operating profit. With a ROE of 15.4, the company has a very attractive valuation with a price to book value of 1.8. It is currently trading at a premium compared to its average historical valuations.

It is worth noting that India Gelatine & Chemicals has a high dividend yield of 3.9% at its current price. The majority shareholders of the company are the promoters, indicating their confidence in the company's future prospects.

In conclusion, while India Gelatine & Chemicals may have a healthy long-term growth potential, its recent negative results and technical factors suggest a cautious approach for investors. MarketsMOJO's downgrade to 'Sell' further reinforces this sentiment.