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 on July 19, 2024. This downgrade is based on several factors that indicate a negative outlook for the company.
One of the main reasons for the 'Sell' rating is the company's high Debt to EBITDA ratio of 3.37 times, which suggests a low ability to service its debt. Additionally, the company's Return on Equity (avg) of 5.04% is also low, indicating a low profitability per unit of shareholders' funds.

In terms of financial performance, Intrasoft Technologies has shown flat results in the March 2024 quarter. The company's interest expenses were the highest at Rs 3.16 crore, and its non-operating income accounted for 63.22% of its Profit Before Tax (PBT). The company's EPS (Q) was also at its lowest at Rs 1.45.

From a technical standpoint, the stock is currently in a Mildly Bearish range and has been generating negative returns since July 19, 2024. The MACD, a key technical factor, has also been Bearish since the same date.

In the long term, the stock has underperformed the BSE 500 index, with a return of -10.71% in the last year. However, the company's ROCE of 6.8 indicates a Very Attractive valuation with a 1 Enterprise value to Capital Employed. The stock is also currently trading at a discount compared to its average historical valuations.

On the other hand, the company's profits have risen by 16.5% in the past year, while the stock has generated a return of -10.71%. This results in a PEG ratio of 4, which is considered high.

In terms of ownership, the promoter holding has decreased this quarter and now stands at 43.06% of the company. This could also be a factor contributing to the 'Sell' rating.

Overall, Intrasoft Technologies' recent downgrade to 'Sell' by MarketsMOJO is based on its high debt, low profitability, and below par performance in both the long term and near term. Investors should carefully consider these factors before making any investment decisions.