International Conveyors Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Low Profitability

International Conveyors, a microcap engineering company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 2nd, 2024. This decision was based on several factors, including the company's high debt to EBITDA ratio of 3.06 times, indicating a low ability to service debt. Additionally, the company's return on equity (avg) of 9.21% suggests a low profitability per unit of shareholders' funds.
In terms of financial performance, International Conveyors saw flat results in June 2024, with net sales growing at a negative rate of -27.48%. The company also had a high interest expense of Rs 2.75 crore and non-operating income accounting for 94.47% of its profit before tax. These factors contribute to the company's current technical trend, which is mildly bearish and has generated -1.09% returns since August 30th, 2024. The key technical factor, RSI, has also been bearish since the same date.

With a return on equity of 22.9, International Conveyors currently has an expensive valuation with a price to book value of 1.9. However, the stock is trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of -2.54%, while its profits have increased by 123.6%. This results in a PEG ratio of 0.1 for the company.

Despite being a microcap company, domestic mutual funds hold only 0% of International Conveyors. This could signify that they are not comfortable with the current price or the business itself. However, the company has shown healthy long-term growth, with operating profit growing at an annual rate of 76.65%.

Overall, International Conveyors has underperformed the BSE 500 in the last 3 years, 1 year, and 3 months, with a return of -2.54%. This, combined with the company's high debt and low profitability, has led to its recent downgrade to a 'Sell'.