IRIS Business Services downgraded to 'Hold' by MarketsMOJO due to low Debt to Equity ratio and stagnant long-term growth

IRIS Business Services, a microcap company in the BPO/ITeS industry, has recently been downgraded to a 'Hold' by MarketsMOJO on April 29, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times on average. Despite this, the company has shown positive results in the past, with a growth in Net Sales of 44.73% and declaring positive results for the last 6 consecutive quarters. In fact, its ROCE (HY) is at a high of 17.80%, while its NET SALES (Q) and PBDIT (Q) are also at their highest at Rs 27.34 crore and Rs 3.50 crore respectively. Technically, the stock is currently in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. However, with an ROE of 15.3, the stock is fairly valued with a 7.9 Price to Book Value. It is also trading at a premium compared to its average historical valuations. In the past year, the stock has generated a return of 87.82%, outperforming the market (BSE 500) returns of 36.89%. However, the company's long-term growth has been poor, with Net Sales growing at an annual rate of 20.94% over the last 5 years. The majority of the company's shareholders are non-institutional, and its market performance has been beating the market in the past year. While the stock has shown strong returns, its profits have not grown at the same rate, with a PEG ratio of 0.8. Overall, MarketsMOJO has downgraded the stock to 'Hold' due to its low Debt to Equity ratio and poor long-term growth.