MarketsMOJO Downgrades Ajanta Soya to 'Hold' Despite Positive Results

Ajanta Soya, a microcap company in the refined oil and vanaspati industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 26, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
Despite this, Ajanta Soya has shown positive results in the last two consecutive quarters, with a growth in net profit of 62.45% in June 2024. The company's PBDIT(Q) is also at its highest at Rs 5.20 crore, while its operating profit to net sales(Q) and PBT less OI(Q) are also at their highest levels.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from mildly bullish on August 23, 2024, and has only generated a return of 0.73% since then.

On the valuation front, Ajanta Soya seems to be trading at an attractive price with a price to book value of 2.1 and a ROE of 8.2. The stock is also currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 23.84%, while its profits have risen by 196.9%. The PEG ratio of the company is also at a low 0.1.

However, the company has shown poor long-term growth, with its operating profit growing at an annual rate of -230.27% over the last 5 years. Additionally, the stock has underperformed the market in the last year, with a return of 23.84%, much lower than the market (BSE 500) returns of 39.36%.

Overall, while Ajanta Soya may have some positive aspects, the recent downgrade to 'Hold' by MarketsMOJO suggests caution for investors. It is important to carefully consider all factors before making any investment decisions.