Innovative Tech Pack Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and High Valuation

Innovative Tech Pack, a microcap company in the plastic products industry, has recently been downgraded to a 'Sell' by MarketsMOJO on February 6, 2024. This decision was based on the company's weak long-term fundamental strength, with a -26.76% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.69.
Furthermore, Innovative Tech Pack has a low profitability per unit of shareholders' funds, with a Return on Equity (avg) of 4.17%. Its valuation is also considered expensive, with a 1.5 Enterprise value to Capital Employed and a PEG ratio of 0.3. However, the stock is currently trading at a discount compared to its average historical valuations.

On a positive note, the company has shown promising results in September 2023, with its PAT(Q) at the highest of Rs 1.29 crore and PBDIT(Q) at the highest of Rs 4.08 crore. The operating profit to net sales(Q) was also at its highest at 11.04%. Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

In terms of ownership, the majority shareholders of Innovative Tech Pack are its promoters. Despite the recent downgrade, the stock has outperformed the market (BSE 500) with a return of 66.25% in the last year, compared to the market's return of 33.23%. However, it is important to note that this performance may not be sustainable in the long run, considering the company's weak fundamentals. Investors are advised to carefully consider all factors before making any investment decisions.