MarketsMOJO Downgrades Graviss Hospitality to 'Sell' Rating Due to Weak Fundamentals

Graviss Hospitality, a microcap company in the hotel industry, has recently received a 'Sell' rating from MarketsMOJO on April 12, 2024. This downgrade is based on several factors that indicate weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the company's average Return on Equity (ROE) of 0.66%, which is considered weak. Additionally, Graviss Hospitality has shown poor long-term growth with only a 2.56% annual increase in Net Sales over the last 5 years. This raises concerns about the company's ability to generate sustainable profits.

Furthermore, the company's EBIT to Interest (avg) ratio is at -4.95, indicating a weak ability to service its debt. This is a cause for concern for potential investors.

In terms of valuation, Graviss Hospitality has a high ROE of 2.3 and a Price to Book Value of 1.9, which is considered expensive. However, the stock is currently trading at a discount compared to its historical valuations.

On a positive note, the company has shown strong profits in the past year with a 550% increase, resulting in a PEG ratio of 0. This indicates that the stock may be undervalued.

Other factors to consider include the company's PBT LESS OI(Q) growth of 54.97%, the highest DEBTORS TURNOVER RATIO(HY) at 217.84 times, and the highest PBDIT(Q) at Rs 5.68 cr. These factors may indicate potential for growth in the future.

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.

It is worth noting that the majority shareholders of Graviss Hospitality are the promoters, which may impact the company's decision-making and direction.

Despite generating consistent returns over the last 3 years and outperforming BSE 500, the recent downgrade by MarketsMOJO raises concerns about the company's long-term performance. Investors should carefully consider these factors before making any investment decisions regarding Graviss Hospitality.