IST Downgraded to 'Sell' by MarketsMOJO Due to Poor Long-Term Growth

IST, a smallcap auto ancillary company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 25, 2024. This decision was based on the company's poor long-term growth, with an annual operating profit growth rate of -5.01% over the last 5 years.
In addition, the company's recent financial results for September 2024 have been flat, with a low operating cash flow of Rs 5.39 crore and a significant increase in interest income of 86.03%. Non-operating income also makes up a large portion of the company's profit before tax.

Furthermore, with a ROE of 10.9, IST is currently trading at a very expensive valuation with a price to book value of 0.8. However, the stock is currently trading at a fair value compared to its historical valuations. Over the past year, the stock has generated a return of 27.36%, but its profits have only increased by 44.3%, resulting in a low PEG ratio of 0.2.

Interestingly, despite being a smallcap company, domestic mutual funds hold only 0% of IST's shares. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company.

On the positive side, IST has a low debt to equity ratio and has consistently generated returns over the last 3 years. It has also outperformed the BSE 500 index in each of the last 3 annual periods.

In terms of technical trends, the stock is currently trading sideways with no clear price momentum. The technical trend has also deteriorated from mildly bullish on November 19, 2024, and has only generated a return of 1.52% since then.

Overall, while IST may have some positive aspects, the recent downgrade by MarketsMOJO and the company's poor long-term growth may make it a risky investment option. Investors should carefully consider all factors before making any decisions regarding this smallcap auto ancillary company.