Igarashi Motors Faces Valuation Shift Amid Declining Profitability Metrics

Igarashi Motors India, a player in the auto components and equipment sector, has recently undergone an adjustment in its evaluation. The revision in its score reflects a shift in valuation metrics, indicating a transition from a fair assessment to one categorized as expensive.
Key financial indicators reveal a PE ratio of 66.86, alongside a price-to-book value of 3.51. The company's enterprise value to EBITDA stands at 18.36, while the EV to EBIT is noted at 40.11. Additionally, the EV to capital employed is recorded at 2.97, and the EV to sales ratio is 2.08. The PEG ratio is relatively low at 0.44, suggesting a disparity between growth expectations and current valuation.

Despite a recent uptick in stock price, Igarashi Motors has faced challenges, including a significant decline in profit after tax for the latest quarter, which fell by 53.4% compared to the previous four-quarter average. The company’s return on capital employed (ROCE) is at 7.10%, further emphasizing the expensive valuation in relation to its performance metrics.

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