Intrasoft Technologies Receives 'Sell' Rating from MarketsMOJO Due to High Debt and Low Profitability

Intrasoft Technologies, a BPO/ITeS company in the microcap category, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors, including the company's high debt to EBITDA ratio of 3.37 times, indicating a low ability to service debt. Additionally, the company's return on equity (avg) of 5.04% is also low, showing a lack of profitability per unit of shareholders' funds.
The company's financial results for the quarter ending March 2024 were also flat, with the highest interest expenses at Rs 3.16 crore and non-operating income accounting for 63.22% of the profit before tax. The earnings per share for the quarter were also at a low of Rs 1.45.

From a technical standpoint, the stock is currently in a mildly bearish range, with the trend deteriorating from mildly bullish on 30th July 2024. The key technical factor, MACD, has also been bearish since the same date.

In the past year, Intrasoft Technologies has underperformed the market, generating a return of only 3.91% compared to the BSE 500's returns of 37.71%. Other factors to consider include a very attractive valuation with a ROCE of 6.8 and a discount compared to its average historical valuations. However, the PEG ratio of the company is 4.3, indicating a high price for its growth prospects.

It is also worth noting that the promoter holding has decreased this quarter and now stands at 43.06% of the company. Overall, based on the current financial and technical indicators, MarketsMOJO has downgraded the stock call on Intrasoft Technologies to 'Sell'.