SAL Automotive Downgraded to 'Sell' by MarketsMOJO, Poor Growth and Negative Results Reported

SAL Automotive, a microcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 3rd, 2024. This decision was based on the company's poor long-term growth, as its operating profit has only grown at an annual rate of 14.60% over the last 5 years. Additionally, the company has recently declared negative results for the first time in 7 consecutive quarters, with a decline of 48.45% in its PAT (HY) and the lowest net sales of Rs 60.78 crore.
Furthermore, SAL Automotive has underperformed the market in the last year, with a return of only 18.35% compared to the market's return of 37.61% (BSE 500). The technical trend for the stock is currently sideways, indicating no clear price momentum, and has generated a negative return of -1.87% since the downgrade on July 3rd.

On a positive note, the company has an attractive valuation with a ROCE of 13.9 and an enterprise value to capital employed ratio of 2.3. It is also currently trading at a discount compared to its average historical valuations. However, its profits have only risen by 8.5% in the past year, resulting in a PEG ratio of 2.8.

It is worth noting that the majority shareholders of SAL Automotive are its promoters. With this recent downgrade and the company's current financial performance, investors may want to carefully consider their position in this microcap auto ancillary company.