SPIC downgraded to 'Sell' by MarketsMOJO due to flat results and underperformance

Southern Petrochemical Industries Corporation (SPIC) has recently been downgraded to a 'Sell' by MarketsMOJO on October 3, 2024. This decision was based on the company's flat results in June 2024, with a growth of only 103.37% in interest and a decline of -27.81% in profits. Additionally, the net sales for the first half of the year have also decreased by -29.12%.
Despite being a smallcap company, SPIC has not gained much interest from domestic mutual funds, with only a 0.01% stake. This could indicate that either the funds are not comfortable with the current price or they have concerns about the company's business.

In the past year, SPIC has underperformed the market, with a return of only 14.03% compared to the market's 36.98%. However, the company has a strong ability to service its debt, with a low Debt to EBITDA ratio of 1.46 times. This, coupled with a healthy long-term growth rate of 46.36% in operating profit, shows potential for future growth.

The technical trend for SPIC is currently sideways, indicating no clear price momentum. The stock has also seen a decline of -2.49% since its Mildly Bullish trend on October 3, 2024.

Despite these factors, SPIC has an attractive valuation with a ROCE of 15.7 and a 1.5 Enterprise value to Capital Employed. It is also currently trading at a discount compared to its historical valuations. However, it is important to note that while the stock has generated a return of 14.03% in the past year, its profits have declined by -38.3%.

In conclusion, MarketsMOJO's downgrade of SPIC to a 'Sell' is based on the company's recent flat results and underperformance in the market. While it has potential for future growth, investors should carefully consider the company's financials and technical trends before making any investment decisions.