ISMT Receives 'Sell' Rating from MarketsMOJO: Factors Indicate Negative Outlook for Company.

ISMT, a smallcap company in the iron and steel industry, has recently received a 'Sell' rating from MarketsMOJO on August 2, 2024. This downgrade is based on several factors that indicate a negative outlook for the company.
One of the main reasons for the 'Sell' rating is the company's high Debt to EBITDA ratio of 6.97 times, which indicates a low ability to service debt. This, coupled with a poor long-term growth rate of only 6.89% in Net Sales over the last 5 years, raises concerns about the company's financial stability.

In addition, ISMT has a low Return on Equity (avg) of 1.19%, indicating low profitability per unit of shareholders' funds. This was reflected in the negative results for the quarter ending June 24, with a significant decline in PBT and PAT. The company also has a low cash reserve of only Rs. 7.31 crore.

Furthermore, the stock is currently trading at a premium compared to its historical valuations, with a Price to Book Value of 2.4 and a PEG ratio of 0.4. This suggests that the stock may be overvalued and not a good investment option.

Another concerning factor is that despite being a smallcap company, domestic mutual funds hold only 0.06% of the company. This could indicate that they are not comfortable with the company's current price or its business.

On a positive note, the stock is technically in a Mildly Bullish range and has shown consistent returns over the last 3 years. However, this may not be enough to outweigh the other negative factors.

In conclusion, the 'Sell' rating on ISMT by MarketsMOJO is based on solid facts and indicators, and investors should carefully consider these factors before making any investment decisions.