Shangar Decor Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Shangar Decor, a microcap company in the miscellaneous industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 11, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 2.40%, poor long-term growth in net sales and operating profit, and a weak ability to service its debt with a low EBIT to Interest ratio.
Additionally, the company's valuation is considered very expensive with a 5.7 Enterprise value to Capital Employed ratio and is currently trading at a discount compared to its historical valuations. However, in the past year, the stock has generated a return of 67.40%, while its profits have risen by 132%.

On a positive note, Shangar Decor declared very positive results in September 2024 with a growth in net profit of 1850%. The company has also consistently declared positive results for the last three quarters, with a significant increase in net sales and ROCE. Furthermore, the stock is currently in a mildly bullish range and has multiple bullish technical indicators such as MACD, Bollinger Band, KST, and OBV.

The majority shareholders of Shangar Decor are non-institutional investors, and the stock has outperformed the market (BSE 500) with a return of 67.40% compared to the market's 30.30% return in the last year. While the company has shown positive results in recent quarters, the overall weak long-term fundamentals and expensive valuation have led to the 'Sell' rating by MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.