Infibeam Avenues Downgraded to 'Sell' by MarketsMOJO, Lack of Growth and Bearish Trend Cited

Infibeam Avenues, a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 10, 2024. This decision was based on various factors, including poor long-term growth and a mildly bearish technical trend.
According to MarketsMOJO, the company's operating profit has only grown by an annual rate of 2.44% over the last 5 years, indicating a lack of significant growth. Additionally, the stock is currently in a mildly bearish range and has generated a return of only 2.29% since the downgrade.

Furthermore, institutional investors have decreased their stake in the company by -0.93% over the previous quarter, suggesting a lack of confidence in its future performance. On the positive side, Infibeam Avenues has a low debt to equity ratio and has declared positive results for the last 12 consecutive quarters.

The company's operating cash flow has also been consistently high, with the highest at Rs 719.71 crore. Its net sales for the last 9 months have grown at a rate of 32.15%, and its return on capital employed (ROCE) is at its highest at 5.93%.

Despite these positive aspects, the company's return on equity (ROE) is only at 4.6, indicating a fair valuation with a price to book value of 2.4. However, the stock is currently trading at a discount compared to its historical valuations.

In the past year, Infibeam Avenues has outperformed the market (BSE 500) with a return of 87.94%, while its profits have risen by 42.4%. This has resulted in a PEG ratio of 1.1, indicating a market-beating performance.

In conclusion, while Infibeam Avenues may have some positive aspects, the recent downgrade by MarketsMOJO and the lack of significant long-term growth may make it a risky investment option. Investors are advised to carefully consider all factors before making any decisions.