MarketsMOJO Downgrades Kesar Petroproducts to 'Sell' Due to Weak Fundamentals and Expensive Valuation

Kesar Petroproducts, a microcap company in the trading industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 4th, 2024. This decision was based on the company's weak long-term fundamental strength, with a -56.95% CAGR growth in operating profits over the last 5 years. Additionally, the company's ROCE of -1.7 indicates a very expensive valuation, with a 1.8 enterprise value to capital employed.
Despite the stock trading at a discount compared to its average historical valuations, it has still generated a return of 276.71% in the past year. However, this growth is not reflected in the company's profits, which have only risen by 683%. The PEG ratio of the company is also at 0, further supporting the 'Sell' recommendation.

On a positive note, Kesar Petroproducts declared very positive results in June 2024, with a growth in net sales of 23.05%. The company has also consistently declared positive results for the last 3 quarters, with a growth in net sales of 55.32% and a higher PAT of Rs 6.64 crore. The PBDIT for the last quarter was also at its highest at Rs 3.13 crore.

Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, the majority shareholders of the company are promoters, which may raise concerns for potential investors.

In terms of market performance, Kesar Petroproducts has outperformed the market (BSE 500) with a return of 276.71% in the last year, compared to the market's return of 31.79%. Overall, with weak long-term fundamentals and an expensive valuation, MarketsMOJO has downgraded the stock to a 'Sell'.