Indiamart Intermesh downgraded to 'Hold' rating by MarketsMOJO, despite strong fundamentals

Indiamart Intermesh, a midcap IT software company, has recently been downgraded to a 'Hold' rating by MarketsMOJO on July 1, 2024. This decision was based on the company's strong long-term fundamental strength, with an average Return on Equity (ROE) of 25.15%, and healthy long-term growth, with an annual operating profit growth rate of 107.37%. Additionally, the company has a low Debt to Equity ratio of 0 times, indicating a stable financial position.
In the last four consecutive quarters, Indiamart Intermesh has declared positive results, with its highest net sales at Rs 314.70 crore and operating profit to net sales at 28.09%. The company also has a high institutional holding of 33.69%, indicating that these investors have better resources and capabilities to analyze the company's fundamentals.

However, the stock is currently in a mildly bearish range, with a deteriorating technical trend from mildly bullish on July 1, 2024. The MACD and KST technical factors are also mildly bearish. With a ROE of 19.3, the stock is considered to have a very expensive valuation with a price to book value of 9.3. However, it is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of -4.66%, while its profits have risen by 18.2%. The PEG ratio of the company is 2.3, indicating that it may be overvalued. Furthermore, the stock has underperformed the BSE 500 index in the last 3 years, 1 year, and 3 months, showing below par performance in both the long-term and near-term.

Overall, while Indiamart Intermesh has strong fundamentals and positive results, its current technical trend and expensive valuation may warrant a 'Hold' rating from investors.