MarketsMOJO Downgrades Beryl Drugs to 'Sell' Due to Weak Performance and High Debt

Beryl Drugs, a microcap pharmaceutical company, has recently been downgraded to a 'Sell' by MarketsMOJO on May 13, 2024. This decision was based on several factors, including weak long-term fundamental strength, poor growth in net sales and operating profit, and a high debt to EBITDA ratio.
In the last five years, Beryl Drugs has only seen an average Return on Capital Employed (ROCE) of 5.27%, indicating a weak long-term performance. Additionally, the company's net sales have only grown at an annual rate of 14.92%, while operating profit has remained at a low 0.44%. This lack of growth potential is a major concern for investors.

Furthermore, Beryl Drugs has a high debt to EBITDA ratio of 3.04 times, indicating a low ability to service its debt. This, coupled with the fact that the company's net sales have decreased by 6.47% in the last quarter, further supports the 'Sell' rating.

On a positive note, the stock is currently in a mildly bullish range and has multiple bullish indicators such as MACD, Bollinger Band, and KST. Additionally, with an ROCE of 14, the stock is currently trading at an attractive valuation with a 1.6 Enterprise value to Capital Employed.

However, it is important to note that the stock is currently trading at a discount compared to its average historical valuations. While the stock has generated a return of 122.87% in the last year, its profits have only risen by 94%, resulting in a PEG ratio of 0.

Beryl Drugs also has a majority of non-institutional shareholders, indicating a lack of interest from major investors. However, the company has consistently generated returns over the last three years and has outperformed the BSE 500 index in each of the last three annual periods.

In conclusion, while Beryl Drugs may have some positive indicators, the overall weak long-term performance and high debt to EBITDA ratio make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.