National Fittings downgraded to 'Sell' by MarketsMOJO due to poor growth and underperformance

National Fittings, a microcap company in the castings/forgings industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 22, 2024. This decision was based on the company's poor long-term growth, negative results in the most recent quarter, and underperformance in the market.
Over the last five years, National Fittings has only seen a 6.25% annual growth in net sales and a 4.00% growth in operating profit. In addition, the company's most recent quarter saw a significant decrease in profits, with a -51.9% fall in PAT(Q) at Rs 0.40 cr. The company's DEBTORS TURNOVER RATIO(HY) is also at its lowest at 13.15 times, indicating potential issues with managing debt.

Furthermore, National Fittings has underperformed in the market, with a return of only 13.95% in the last year compared to the market's return of 31.91%. The technical trend for the stock is currently sideways, showing no clear price momentum, and has generated -5.06% returns since the downgrade.

However, the company does have a strong ability to service debt, with a low Debt to EBITDA ratio of 1.34 times. It also has an attractive valuation with a Price to Book Value of 2, trading at a discount compared to its historical valuations. Despite this, the company's ROE of 9.1 is relatively low.

It is worth noting that the majority of National Fittings' shareholders are non-institutional, which may contribute to the company's underperformance in the market. Overall, based on the current information, MarketsMOJO has downgraded the stock to 'Sell' due to its poor long-term growth and recent negative results.