MarketsMOJO Downgrades Race Eco Chain to 'Sell' Due to Poor Performance and High Debt

Race Eco Chain, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 18, 2024. This decision was based on several factors that indicate a poor performance and low profitability for the company.
One of the main reasons for the downgrade is the company's poor management efficiency, with a low Return on Capital Employed (ROCE) of only 3.35%. This signifies a low profitability per unit of total capital, including equity and debt. Additionally, the company has a high Debt to EBITDA ratio of 3.45 times, indicating a low ability to service debt.

Furthermore, Race Eco Chain has a low Return on Equity (ROE) of 5.23%, which shows a low profitability per unit of shareholders' funds. This, combined with a high Price to Book Value of 8.2, indicates a very expensive valuation for the company.

On the positive side, the company has shown healthy long-term growth, with Net Sales growing at an annual rate of 46.50% and Operating profit at 45.00%. In fact, the company's NET SALES(Q) and PBDIT(Q) have reached their highest levels at Rs 106.29 cr and Rs 1.85 cr, respectively.

However, the technical trend for Race Eco Chain is currently sideways, indicating no clear price momentum. In fact, the technical trend has deteriorated since November 18, 2024, when it was mildly bullish, and has generated a -1.31% return since then.

In conclusion, based on the data and analysis provided by MarketsMOJO, it is recommended to sell Race Eco Chain stock due to its poor management efficiency, high debt, and expensive valuation. Investors should also keep an eye on the company's technical trend for any potential changes in the future.