Sreechem Resins Downgraded to 'Sell' by MarketsMOJO, Despite Positive Growth and Promoter Confidence

Sreechem Resins, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 12, 2024. This decision was based on various factors, including the company's high management efficiency with a ROCE of 15.87%. Additionally, Sreechem Resins has shown a growth in net sales of 67.82%, leading to positive results in March 2024 and for the last two consecutive quarters.
Furthermore, the company's profits after tax (HY) have also increased to Rs 3.02 crore, while its net sales (Q) have grown at a rate of 67.8%. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. This trend has deteriorated since August 12, 2024, with a -3.13% return since then. The Bollinger Band, a key technical factor, has also been sideways since the same date.

Despite the current technical trend, Sreechem Resins has an attractive valuation with a ROCE of 20.3 and an enterprise value to capital employed ratio of 1.8. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 67.34%, while its profits have risen by 152%. This results in a PEG ratio of 0.1 for the company.

Moreover, there has been a rise in promoter confidence as they have increased their stake in the company by 3.76% in the previous quarter and currently hold 24.8% of the company. This increase in stake is a positive sign of high confidence in the future of the business.

In terms of market performance, Sreechem Resins has outperformed the market (BSE 500) with a return of 67.34% in the last year, compared to the market's return of 35.35%. While the stock may have been downgraded to 'Sell', it is important to consider all the factors and make an informed decision before investing in Sreechem Resins.