SML ISUZU Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Low Growth

SML ISUZU, a smallcap company in the auto-trucks industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was based on several factors, including the company's high debt to EBITDA ratio of 4.60 times, indicating a low ability to service debt. Additionally, the company has shown poor long-term growth with a net sales growth rate of only 10.10% over the last 5 years.
Furthermore, SML ISUZU has a return on equity of 9.78%, which is considered low and suggests a low profitability per unit of shareholders' funds. The company also has an expensive valuation with a 4.6 enterprise value to capital employed ratio and is currently trading at a discount compared to its historical valuations.

Despite its size, domestic mutual funds hold only 0% of the company, which could indicate that they are not comfortable with the current price or the business itself. On the other hand, the company has shown healthy long-term growth with an annual operating profit growth rate of 38.65%.

In the last 10 consecutive quarters, SML ISUZU has declared positive results and has the highest operating profit to interest ratio of 10.00 times. Its profits have also grown by 45.9% in the last quarter, with the highest net sales of Rs 746.10 crore.

The technical trend for the stock is currently sideways, indicating no clear price momentum. However, it has consistently outperformed the BSE 500 index in the last 3 annual periods and has generated a return of 45.83% in the last year. Overall, while SML ISUZU may have some positive aspects, the recent downgrade to 'Sell' by MarketsMOJO suggests caution for potential investors.