The Investment Trust of India: A Mixed Bag for Investors

The Investment Trust of India, a microcap finance company, has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on December 20, 2023.
The company has shown positive results in the third quarter of 2023, with a growth of 176.1% in its PAT (quarterly) at Rs 10.32 crore and the highest PBDIT (quarterly) at Rs 17.87 crore. Its operating profit to net sales ratio has also reached a high of 23.36%.

Technically, the stock is in a bullish range and has shown improvement from being mildly bullish on December 20, 2023. The MACD and KST technical factors also indicate a bullish trend.

However, the company's long-term fundamental strength is weak with an average ROE of 3.82%. Its net sales have declined at an annual rate of -10.53% and operating profit at -19.96%, indicating poor long-term growth.

The stock also has a very expensive valuation with a price to book value of 0.8 and is trading at a discount compared to its historical valuations. Despite generating a return of 13.78% in the past year, its profits have only risen by 336.3%, resulting in a low PEG ratio of 0.1.

It is worth noting that despite being a microcap company, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, while The Investment Trust of India has shown positive results in the recent quarter and is technically in a bullish trend, its weak long-term fundamental strength and expensive valuation may make it a risky investment. Investors should carefully consider all factors before making any decisions regarding this microcap finance company.