IST Downgraded to 'Sell' by MarketsMOJO, Poor Long-Term Growth and High Valuation Raise Concerns

IST, a smallcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on the company's poor long-term growth, with an annual rate of -5.01% in operating profit over the last 5 years.
In addition, the company's recent results for June 2024 have been flat, with the lowest operating profit to interest ratio at 9.12 times and the highest interest at Rs 2.52 crore. Non-operating income also makes up a significant portion of the company's profit before tax at 72.11%.

Furthermore, IST has a high ROE of 9.6, leading to a very expensive valuation with a price to book value of 0.8. The stock is currently trading at a premium compared to its historical valuations. While the stock has generated a return of 27.91% in the past year, its profits have only risen by 38.6%, resulting in a PEG ratio of 0.2.

Another concerning factor is that despite its size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the price or the business, as they have the capability to conduct in-depth research on companies.

On the positive side, IST has a low debt to equity ratio of 0 times on average. However, the technical trend for the stock is currently sideways, with no clear price momentum. The trend has also deteriorated from mildly bullish on 05-Nov-24, generating only 0.33% returns since then.

Overall, with the recent downgrade to 'Sell' and various concerning factors, investors may want to approach IST with caution.