MarketsMOJO downgrades Bombay Oxygen Investments to 'Hold' due to low Debt to Equity ratio

Bombay Oxygen Investments, a microcap company in the industrial gases and fuels industry, has recently been downgraded to a 'Hold' by MarketsMOJO on September 5th, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
Despite declaring outstanding results in June 2024 with a growth in net profit of 208.86%, the company's management efficiency is poor with a low Return on Equity (ROE) of 7.95%. This signifies low profitability per unit of shareholders' funds.

However, the company has shown positive results for the last 5 consecutive quarters and has a strong operating cash flow of Rs -1.78 Cr. It also has a high ROCE (Return on Capital Employed) of 15.18% and a high DPS (Dividend Per Share) of Rs 25.00.

Technically, the stock is in a mildly bullish range with its MACD and KST technical factors also showing a bullish trend. In the long term, the stock has outperformed the BSE 500 and has generated a return of 210.43% in the last year.

Despite this, the company's long term growth has been poor with net sales growing at an annual rate of 137.18% and operating profit at 16.41% over the last 5 years. This, coupled with a high valuation of 1.2 Price to Book Value and a PEG ratio of 0.1, makes the stock very expensive.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company, which could indicate a lack of confidence in the company's business or its current stock price. Overall, while the stock has shown strong performance in the near term, its long term growth and management efficiency may be cause for concern.