MarketsMOJO downgrades Ajanta Soya to 'Sell' due to poor growth and bearish trend

Ajanta Soya, a microcap company in the refined oil and vanaspati industry, has recently been downgraded to a 'Sell' by MarketsMOJO on February 5th, 2024. This decision was based on several factors, including poor long-term growth and a technically bearish trend.
Over the past 5 years, Ajanta Soya's operating profit has seen a decline of -230.27%, indicating a lack of growth. The stock is also currently in a Mildly Bearish range, with a deteriorating technical trend since February 1st, 2024, resulting in a -4.28% return. Additionally, the stock's Bollinger Band and KST technical factors are also bearish.

One of the main reasons for the 'Sell' rating is the company's negative EBITDA, making it a risky investment compared to its historical valuations. In the past year, while the stock has generated a return of -9.56%, its profits have fallen by -107.6%. This underperformance is also evident when compared to the market (BSE 500), which has generated returns of 31.75% in the same time period.

On a positive note, Ajanta Soya has a low Debt to Equity ratio of 0 times, indicating a stable financial position. The company's PBDIT(Q), OPERATING PROFIT TO NET SALES(Q), and PAT(Q) are also at their highest levels, at Rs 0.63 cr, 0.23%, and Rs 1.18 cr respectively.

It is worth noting that the majority of Ajanta Soya's shareholders are non-institutional, which may have contributed to the company's underperformance in the market. Overall, with a 'Sell' rating and several concerning factors, it may be wise for investors to approach Ajanta Soya with caution.