Sharda Motor Industries downgraded to 'Hold' by MarketsMOJO due to management efficiency and financial performance.

Sharda Motor Industries, a midcap auto ancillary company, has recently been downgraded to a 'Hold' by MarketsMOJO on September 11, 2024. This decision was based on various factors such as the company's management efficiency, debt to equity ratio, long term growth, and recent financial results.
One of the main reasons for the downgrade is the company's high management efficiency, with a ROE of 22.87%. Additionally, Sharda Motor Industries has a low debt to equity ratio, averaging at 0 times. This indicates a healthy financial position for the company.

Moreover, the company has shown consistent growth in its net sales and operating profit, with an annual growth rate of 20.99% and 28.69%, respectively. It has also declared positive results for the last four consecutive quarters, with a significant increase in PAT (HY) at Rs 165.13 crore, growing at 40.79%.

From a technical standpoint, the stock is currently in a mildly bullish range, with both MACD and KST technical factors showing a bullish trend. However, with a ROE of 29.8, the stock is fairly valued with a price to book value of 7.6. It is also trading at a premium compared to its average historical valuations.

Over the past year, Sharda Motor Industries has generated a return of 140.65%, outperforming BSE 500 in each of the last three annual periods. However, its profits have only risen by 47.1%, resulting in a PEG ratio of 0.5.

Furthermore, the company has been rated among the top 1% of companies by MarketsMojo, out of 4,000 stocks. It has also shown consistent returns over the last three years, making it a reliable investment option.

However, one concerning factor is the decreasing stake of promoters in the company, which has decreased by -8.89% over the previous quarter. Currently, promoters hold 64.31% of the company, which may signify reduced confidence in the future of the business.

In conclusion, while Sharda Motor Industries has shown strong financial performance and consistent returns, the recent downgrade to 'Hold' by MarketsMOJO and decreasing promoter confidence should be taken into consideration before making any investment decisions.