MarketsMOJO Downgrades Rishi Techtex Due to Weak Fundamentals and High Debt

Rishi Techtex, a microcap company in the packaging industry, has recently received a 'Sell' rating from MarketsMOJO on May 14, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a -5.91% CAGR growth in operating profits over the last 5 years. Additionally, Rishi Techtex has a high debt to EBITDA ratio of 3.10 times, indicating a low ability to service debt. The company's return on equity (avg) of 5.01% also suggests low profitability per unit of shareholders' funds.
In terms of technical factors, the stock is currently in a mildly bullish range, with both its MACD and KST indicators showing a bullish trend. However, with a ROCE of 7.4, the stock is considered to have an attractive valuation with a 1.1 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

Despite its recent market-beating performance, with a return of 117.38% in the last year, Rishi Techtex's profits have only risen by 69%. This is reflected in the company's PEG ratio of 0.3, indicating that its stock may be overvalued. It is worth noting that the majority of the company's shareholders are non-institutional investors.

While Rishi Techtex has shown strong performance in the long term, it has also outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months. However, with the recent downgrade from MarketsMOJO, investors may want to carefully consider their position in this microcap company in the packaging industry.