MarketsMOJO upgrades JSW Steel to 'Hold' rating, despite falling profits and high debt

JSW Steel, a largecap company in the steel/sponge iron/pig iron industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This upgrade is based on multiple bullish factors, including a technically bullish trend, positive indicators such as MACD, Bollinger Band, and KST, and a fair valuation with a 2 Enterprise value to Capital Employed.
Despite a 33.99% return in the past year, the company's profits have fallen by -41.9%. However, it has high institutional holdings at 36.7%, indicating that these investors have the capability and resources to analyze the company's fundamentals.

JSW Steel has also shown market-beating performance in the long term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months. With a market cap of Rs 2,33,296 crore, it is the largest company in the sector and accounts for 23.34% of the entire sector's market share. Its annual sales of Rs 170,836 crore make up 22.02% of the industry.

However, the company has a high Debt to EBITDA ratio of 2.73 times, indicating a low ability to service debt. This is further supported by a fall in operating profit of -1.48% and negative results declared for the last 3 consecutive quarters. In addition, the company's operating cash flow and profit to interest ratio are at their lowest levels, and its PAT has fallen by -64.7%.

Overall, while JSW Steel has shown positive indicators and market-beating performance, its high debt and negative results may be cause for concern. Investors are advised to hold onto their stocks and monitor the company's performance closely.