Shah Metacorp Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and High Debt

Shah Metacorp, a microcap company in the iron and steel industry, has recently received a 'Sell' rating from MarketsMOJO on June 28, 2024. This downgrade is based on the company's weak long-term fundamental strength, high debt to EBITDA ratio, and low profitability per unit of shareholders' funds.
One of the main reasons for the 'Sell' rating is the company's negative operating profits, with a CAGR growth of -205.32% over the last 5 years. This indicates a decline in the company's financial performance. Additionally, Shah Metacorp's high debt to EBITDA ratio of 6.85 times raises concerns about its ability to service its debt.

Moreover, the stock is trading at a risky level compared to its historical valuations. Although it has generated a return of 35.96% in the past year, its profits have only increased by 294.5%, resulting in a low PEG ratio of 0.2.

On the positive side, the company has shown a growth in net sales of 258.48% and has declared positive results for the last 6 consecutive quarters. In the latest quarter, PBDIT(Q) was at its highest at Rs 2.18 crore, PBT LESS OI(Q) at Rs 1.39 crore, and NET SALES(Q) at Rs 46.28 crore.

From a technical standpoint, the stock is currently in a mildly bullish range, with indicators like MACD, KST, and OBV showing bullish signals.

It is worth noting that the majority of shareholders in Shah Metacorp are non-institutional investors, which may contribute to the stock's volatility.

In conclusion, while Shah Metacorp has shown positive results in terms of net sales and technical indicators, its weak long-term fundamentals and high debt to EBITDA ratio make it a risky investment. Investors should carefully consider these factors before making any decisions regarding this microcap company in the iron and steel industry.