Kesar Petroproducts Downgraded to 'Sell' by MarketsMOJO, Despite Recent Positive Results

Kesar Petroproducts, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 4th, 2024. This decision was based on the company's weak long-term fundamental strength, with a -56.95% CAGR growth in operating profits over the last 5 years. Additionally, the company's ROCE of -1.9 indicates a very expensive valuation with a 1.5 enterprise value to capital employed.
Despite the stock trading at a discount compared to its average historical valuations, it has still generated a return of 224.54% in the past year. However, this growth in stock price is not reflected in the company's profits, which have only risen by 683%. This results in a PEG ratio of 0, indicating that the stock may be overvalued.

On a positive note, Kesar Petroproducts declared very positive results in June 2024, with a growth in net sales of 23.05%. The company has also consistently declared positive results for the last 3 quarters, with a higher PAT of Rs 5.17 crore and a 23.1% growth in net sales in the last quarter. Additionally, the company's PBDIT of Rs 3.13 crore is the highest it has been in the last quarter.

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, it is important to note that the majority shareholders of Kesar Petroproducts are promoters.

Despite the market-beating performance of the stock, with a return of 224.54% in the last year, it is still important to consider the company's weak long-term fundamentals and expensive valuation. Investors should carefully evaluate all factors before making any investment decisions.