Salasar Techno Engineering downgraded to 'Sell' by MarketsMOJO due to high debt and poor growth

Salasar Techno Engineering, a smallcap company in the industrial equipment industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on several factors, including the company's high debt to EBITDA ratio of 2.85 times, indicating a low ability to service debt. Additionally, the company has shown poor long-term growth with an annual operating profit growth rate of only 10.83% over the last 5 years.
In their latest financial results for June 2024, Salasar Techno Engineering reported flat results and a low inventory turnover ratio of 3.56 times. The company's operating profit to interest ratio was also at its lowest at 2.35 times. These factors contribute to the company's reduced ability to generate profits and meet its financial obligations.

Furthermore, the promoters of Salasar Techno Engineering have decreased their stake in the company by -2.79% over the previous quarter, indicating a lack of confidence in the company's future prospects. This decrease in promoter stake may also be a cause for concern for potential investors.

Other factors to consider include the technical trend of the stock, which is currently sideways with no clear price momentum. The stock has also underperformed compared to its average historical valuations and has a PEG ratio of 4.8, indicating a potentially overvalued stock.

However, Salasar Techno Engineering has shown consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. With a ROCE of 14.6 and a fair valuation with a 5.1 Enterprise value to Capital Employed, the company may still hold potential for investors in the long run.