International Conveyors Upgraded to 'Hold' by MarketsMOJO, Despite Concerns Over Debt and Valuation

International Conveyors, a microcap engineering company, has recently been upgraded to a 'Hold' by MarketsMOJO. This decision is based on the company's healthy long-term growth, with an annual operating profit growth rate of 76.65%. Additionally, the technical trend of the stock has improved from sideways to mildly bullish, with the Bollinger Band and KST technical factors also showing a bullish trend.
However, there are some concerns regarding the company's ability to service its debt, as it has a high debt to EBITDA ratio of 3.06 times. This could potentially impact the company's profitability in the long run. In fact, the company has only been able to generate a return on equity of 9.21%, indicating low profitability per unit of shareholders' funds.

In terms of financial performance, the company's results for the quarter ending June 2024 were flat, with a decline of 27.48% in net sales. The company also had a high interest expense of Rs 2.75 crore and non-operating income accounted for 94.47% of its profit before tax.

Despite having a return on equity of 22.9, the company's valuation is considered to be very expensive with a price to book value of 2. This is also reflected in the fact that the stock is currently trading at a discount compared to its average historical valuations. However, in the past year, the company's profits have risen by 123.6%, 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's shares. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company.

Overall, International Conveyors has had a below par performance in both the long term and near term. In the last year, the stock has generated a return of -0.94%, underperforming the BSE 500 index. This trend has also been seen in the last 3 years, 1 year, and 3 months. Investors should carefully consider these factors before making any investment decisions regarding this company.