Igarashi Motors India Receives 'Buy' Rating and Shows Strong Financial Performance

Igarashi Motors India, a smallcap company in the auto ancillary industry, has recently received a 'Buy' rating from MarketsMOJO. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.10 times. Additionally, the company has shown very positive results in the last quarter, with a growth in net profit of 58.75%. Its operating profit to net sales ratio is also at its highest at 11.40%, and its net sales have grown by 22.5%.
Technically, the stock is in a bullish range and the technical trend has improved from mildly bullish to bullish on 28-Oct-24. Multiple factors, such as MACD, Bollinger Band, and OBV, also indicate a bullish trend for the stock.

However, there are some risks associated with investing in Igarashi Motors India. The company has shown poor long-term growth, with an annual growth rate of -10.27% in operating profit over the last 5 years. Its ROCE is also at 4.3, indicating an expensive valuation with a 4.1 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 18.39%, which is lower than the market (BSE 500) returns of 34.46%. This could be a concern for investors, as the company's profits have only risen by 50.1% in the same period, resulting in a PEG ratio of 2.7.

Another factor to consider is that despite its size, domestic mutual funds hold only 0.73% of the company. This could indicate that they are not comfortable with the current price or the business, as they have the capability to conduct in-depth research on companies.

Overall, while Igarashi Motors India has its risks, the recent 'Buy' rating from MarketsMOJO and its strong financial performance in the last quarter make it a promising investment opportunity in the auto ancillary industry. Investors should carefully consider these factors before making any investment decisions.