MarketsMOJO downgrades Sandhar Technologies Limited to 'Sell' due to poor growth and institutional investor pullback

Sandhar Technologies Limited, a smallcap auto ancillary company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on various factors such as poor long-term growth, technical trend, and falling participation by institutional investors.
According to MarketsMOJO, the company has shown a slow growth rate of only 3.40% in its operating profit over the last 5 years. This indicates a lack of potential for future growth. The stock is also currently in a mildly bearish range, with a negative return of -2.31% since November 8, 2024. Technical indicators such as RSI, MACD, Bollinger Band, and KST all point towards a bearish trend for the stock.

Institutional investors, who have better resources and capabilities to analyze company fundamentals, have also decreased their stake in Sandhar Technologies Limited by -0.85% in the previous quarter. This further supports the 'Sell' call on the stock.

Moreover, the company has underperformed the market in the last 1 year, with a return of only 20.35% compared to the market's return of 30.56%. However, the company does have a low debt to equity ratio and has declared positive results for the last 5 consecutive quarters. Its ROCE (HY) is also the highest at 11.48%, and its inventory turnover ratio (HY) is at 10.45 times. Additionally, its PBT less OI (Q) has grown at 21.22%.

Despite these positive factors, the stock is currently trading at a discount compared to its historical valuations. Its ROCE of 10.9 also indicates an attractive valuation with a 2.1 enterprise value to capital employed. However, even with a return of 20.35% in the last year, the company's profits have only risen by 42.4%, resulting in a PEG ratio of 0.6.

In conclusion, based on the analysis by MarketsMOJO, it is recommended to sell Sandhar Technologies Limited stock due to its poor long-term growth, technical trend, and decreasing participation by institutional investors.