Insecticides India downgraded to 'Hold' by MarketsMOJO due to strong debt servicing ability and mixed financial performance

Insecticides India, a smallcap company in the pesticides and agrochemicals industry, has recently been downgraded to a 'Hold' by MarketsMOJO on October 7, 2024. This decision was based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 0.74 times.
In terms of financial performance, Insecticides India has shown positive results in June 2024. Its operating cash flow was at its highest at Rs 184.55 crore, while its PBT less OI (Q) grew by 76.17% at Rs 62.91 crore and its PAT (Q) grew by 68.2% at Rs 49.01 crore.

Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, KST, DOW, and OBV indicating a bullish trend. Additionally, with a ROE of 10.1, the stock is considered to have a very attractive valuation with a price to book value of 2.4. It is also trading at a discount compared to its average historical valuations.

In the past year, Insecticides India has generated a return of 63.02%, outperforming the BSE 500. However, its long-term growth has been poor, with an annual growth rate of -12.83% in operating profit over the last 5 years.

The majority shareholders of Insecticides India are the promoters, indicating their confidence in the company's future prospects. While the stock has shown market-beating performance in the long term as well as the near term, it is important to note the poor long-term growth in operating profit. Overall, MarketsMOJO's downgrade to 'Hold' suggests a cautious approach towards investing in Insecticides India.