MarketsMOJO Downgrades The Investment Trust of India to 'Sell' Due to Weak Fundamentals and High Valuations

The Investment Trust of India, a smallcap company in the finance/NBFC industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 4, 2024. This decision was based on weak long-term fundamental strength, with an average Return on Equity (ROE) of 1.48% and poor long-term growth in net sales and operating profit.
The stock is also considered to be very expensive, with a price to book value of 1.7 and a ROE of 2.8. 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 154.82%, but its profits have only risen by 115.7%, resulting in a low PEG ratio of 0.3.

One interesting factor to note is that despite its size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the current price or the business itself, as they have the capability to conduct in-depth research on companies.

On a positive note, the company has shown strong results in June 2024, with a 35.40% growth in PAT (HY) and the highest EPS (Q) at Rs 2.37. Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

In terms of performance, The Investment Trust of India has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months, making it a market-beating stock in both the long and near term. However, considering the recent downgrade and other factors, it may be wise for investors to approach this stock with caution.