KSB Receives 'Sell' Rating from MarketsMOJO Due to Poor Growth and Expensive Valuation.

KSB, a midcap company in the compressors/pumps industry, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including poor long-term growth, technical trends, and expensive valuation.
Over the last 5 years, KSB's net sales have only grown at an annual rate of 14.11%, while operating profit has increased by 19.43%. This indicates a lack of significant growth potential for the company. Additionally, the stock is currently in a Mildly Bearish range, with technical indicators such as MACD, Bollinger Band, and KST all pointing towards a bearish trend.

One of the main reasons for the 'Sell' rating is the company's expensive valuation. With a ROE of 16.1 and a price to book value of 10.2, KSB is trading at a premium compared to its historical valuations. Furthermore, while the stock has generated a return of 35.22% over the past year, its profits have only increased by 9.6%. This results in a high PEG ratio of 6.6, indicating an overvalued stock.

On a positive note, KSB has a low debt to equity ratio and has shown strong results in June 2024, with the highest operating cash flow and cash and cash equivalents. However, the majority of the company's shareholders are promoters, which may not sit well with potential investors.

With a market cap of Rs 14,463 cr, KSB is the second biggest company in the compressors/pumps industry, making up 19.28% of the entire sector. Its annual sales of Rs 2,356.50 cr account for 15.54% of the industry. While these numbers may seem impressive, the overall outlook for KSB is not favorable, leading to the 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any decisions regarding KSB stock.