JTL Industries Downgraded to 'Sell' by MarketsMOJO Due to Flat Results and Negative Technical Trends

JTL Industries, a smallcap company in the iron and steel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 1, 2024. This downgrade is based on the company's flat results in the March 2024 quarter, with a decrease of 31.38% in PBT less OI(Q) at Rs 34.23 crore and a lowest ROCE(HY) of 19.54%. Additionally, the company's net sales(Q) have also decreased to Rs 465.94 crore, the lowest in recent times.
The stock is currently in a Mildly Bearish range, with its technical trend deteriorating from Mildly Bullish on July 1, 2024. Since then, the stock has generated a return of -1.37%. The MACD and KST technical factors are also Mildly Bearish, indicating a negative trend for the stock.

Despite being a smallcap company, JTL Industries has only 0.14% of its shares held by domestic mutual funds. This could signify that the mutual funds are either not comfortable with the current price of the stock or the company's business.

In the last year, JTL Industries has underperformed the market, with a return of 22.68% compared to the market's (BSE 500) return of 37.64%. However, the company has a strong ability to service debt with a low Debt to EBITDA ratio of 0.58 times. It also has a healthy long-term growth rate, with net sales growing at an annual rate of 36.75% and operating profit at 53.58%.

With a ROE of 14.6, JTL Industries is currently fairly valued with a price to book value of 4.8. The stock is also trading at a discount compared to its average historical valuations. Despite generating a return of 22.68% in the last year, the company's profits have only risen by 25.2%, indicating a slower growth rate. Based on these factors, MarketsMOJO has downgraded JTL Industries to a 'Sell'.