Josts Engineering Company Downgraded to 'Hold' by MarketsMOJO, Despite Positive Results and Bullish Trend

Josts Engineering Company, a microcap engineering company, has recently been downgraded to a 'Hold' by MarketsMOJO on May 24, 2024. This decision was based on various factors such as the company's high management efficiency with a ROCE of 0%, indicating a strong ability to service debt with a low Debt to EBITDA ratio of 0 times. Additionally, the company has declared positive results for the last 3 consecutive quarters, with a growth of 56.35% in PAT(HY) at Rs 6.52 cr and the highest NET SALES(Q) at Rs 61.84 cr.
Technically, the stock is currently in a bullish range and has shown improvement since April 3, 2024, generating a return of 15.16%. Multiple factors such as MACD, KST, DOW, and OBV are also indicating a bullish trend for the stock.

However, there has been a decrease in promoter holding this quarter, with the current holding at 47.2% of the company. Despite this, the stock has shown market-beating performance in the long term, generating a return of 201.80% in the last 1 year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

On the downside, the company has shown poor long-term growth with a 10.76% annual growth rate in Net Sales over the last 5 years. Additionally, with a ROCE of 21.9, the stock is currently trading at a very expensive valuation with a 7.2 Enterprise value to Capital Employed. However, it is currently trading at a discount compared to its average historical valuations.

In the past year, while the stock has generated a return of 201.80%, its profits have only risen by 39.1%, resulting in a PEG ratio of 1.5. Overall, Josts Engineering Company has shown strong financial performance in the recent quarters, but its long-term growth and expensive valuation may be a cause for concern for investors.