Man Industries (India) Downgraded to 'Sell' by MarketsMOJO on Poor Growth and High Valuation

Man Industries (India) is a smallcap company in the iron and steel industry. However, recent news from MarketsMOJO has downgraded their stock call to 'Sell' on August 23, 2024. This is due to poor long-term growth, with an annual rate of -8.85% over the last 5 years in operating profit.
In addition, the company has also reported negative results in June 2024, with a 27.4% decrease in PAT(Q) and a 27.97% increase in INTEREST(9M). The OPERATING PROFIT TO INTEREST (Q) ratio is also at its lowest at 2.14 times. This, combined with a ROE of 7.5 and a high valuation with a 2 Price to Book Value, makes the stock expensive.

Furthermore, the stock is currently trading at a premium compared to its average historical valuations. While it has generated a return of 189.13% in the past year, its profits have only risen by 54.2%, resulting in a PEG ratio of 0.6.

Another concerning factor is that 27.23% of the promoter shares are pledged. In times of falling markets, this can put additional downward pressure on the stock prices.

However, the company does have a strong ability to service debt, with a low Debt to EBITDA ratio of 0.59 times. Technically, the stock is in a Mildly Bullish range, with multiple factors such as MACD, KST, and DOW being Bullish.

Despite its recent downgrade, Man Industries (India) has shown market-beating performance in the long term as well as the near term. Along with generating 189.13% returns in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months.