JBM Auto Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Poor Growth

JBM Auto, a largecap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on several factors, including the company's high debt to EBITDA ratio of 3.53 times, indicating a low ability to service debt. Additionally, JBM Auto has shown poor long-term growth with an annual operating profit growth rate of only 12.59% over the last 5 years.
The company's recent financial results for June 2024 also show a decline, with a -36.9% decrease in PBT LESS OI(Q) and a -25.3% decrease in PAT(Q). Furthermore, the company's interest expenses have grown by 32.16% in the last 9 months. With a ROCE of 12.8, JBM Auto is currently trading at a very expensive valuation with a 7.6 Enterprise value to Capital Employed.

Despite its size, JBM Auto has a low ownership by domestic mutual funds, with only 0.15% of the company's shares held by them. This could indicate that they are not comfortable with the company's current price or business. In the last year, the stock has underperformed the market, generating a return of 25.76% compared to the market's return of 38.49%.

Other factors to consider include the technical trend, which is currently sideways with no clear price momentum, and the company's PEG ratio of 3, indicating an expensive valuation. Overall, MarketsMOJO's downgrade of JBM Auto to 'Sell' suggests caution for investors considering this stock.