Super Crop Safe downgraded to 'Sell' by MarketsMOJO due to weak financials and technical trend.

Super Crop Safe, a microcap company in the pesticides and agrochem industry, has recently been downgraded to a 'Sell' by MarketsMOJO on June 21, 2024. This decision was based on several factors, including weak long-term fundamental strength, poor ability to service debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the downgrade is the company's -16.62% CAGR growth in operating profits over the last 5 years. This indicates a lack of consistent growth and stability in the company's financial performance. Additionally, the company's EBIT to Interest ratio of 0.63 is a cause for concern as it suggests a weak ability to cover its interest expenses.

Furthermore, the technical trend of the stock has deteriorated from Mildly Bullish to Mildly Bearish on June 21, 2024. The MACD and KST technical factors are also bearish, indicating a potential downward trend in the stock's price.

Another factor contributing to the 'Sell' rating is the decrease in promoter confidence. Promoters have reduced their stake in the company by -0.56% over the previous quarter, signaling a lack of faith in the company's future prospects.

However, there are some positive aspects to consider. The company has declared positive results for the last 5 consecutive quarters, with higher net sales and profits. Its debtors turnover ratio is also at its highest at 2.62 times, indicating efficient management of its receivables.

Moreover, with a ROCE of 7.4 and an attractive valuation of 1.4 Enterprise value to Capital Employed, the stock may seem like a good investment opportunity. It is also currently trading at a discount compared to its average historical valuations.

In the past year, the stock has outperformed the market (BSE 500) with a return of 87.83%, while its profits have also increased by 87%. This translates to a PEG ratio of 0.3, which is considered undervalued.

In conclusion, while Super Crop Safe may have some positive aspects, the overall outlook for the company is not favorable. Investors should carefully consider the risks before making any investment decisions.