NACL Industries, a small-cap player in the pesticides and agrochemicals sector, has recently faced a downgrade to ‘Sell’ by MarketsMOJO as of January 8, 2025. The company’s financial performance for the second quarter of FY24-25 showed some positive signs, including a significant operating profit growth rate of 31.12%. However, concerns about its financial health persist.
The company’s high Debt to EBITDA ratio of 10.46 times raises alarms about its ability to service debt, indicating potential financial strain. Additionally, NACL Industries has reported an average Return on Equity of 9.69%, reflecting low profitability per unit of shareholders’ funds. The stock is currently in a mildly bearish range, with technical indicators such as MACD and Bollinger Bands suggesting a deteriorating trend.
Institutional investor participation has also declined, with a 1.02% decrease in stakes over the previous quarter, leaving them with only 0.18% of the company. Over the past year, NACL Industries has underperformed the market, generating negative returns of -11.56%, while the broader BSE 500 index returned 13.89%. Despite some positive operational metrics, the overall outlook remains cautious.
