ITC Receives 'Buy' Rating from MarketsMOJO, Strong Fundamentals and Technical Outlook Support

ITC, one of the largest cigarette and tobacco companies in India, has recently received a 'Buy' rating from MarketsMOJO. This upgrade is based on the company's strong long-term fundamental strength, with an average Return on Equity (ROE) of 23.77%. Additionally, ITC has shown healthy long-term growth, with an annual growth rate of 7.46% in net sales.
One of the key factors contributing to this 'Buy' rating is the company's low Debt to Equity ratio, which is at 0 times on average. This indicates a strong financial position and stability for ITC.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement in its trend from Mildly Bullish on 21-Aug-24. Multiple technical indicators, such as MACD, Bollinger Band, and KST, also suggest a bullish outlook for the stock.

Another positive aspect for ITC is its high institutional holdings, which stand at 84.53%. This indicates that these investors have better capabilities and resources to analyze the company's fundamentals compared to retail investors.

However, there are some risks to consider. The company's results for Jun 24 were flat, which could impact its stock performance. Additionally, with an ROE of 27.5, the stock is currently trading at a very expensive valuation with a price to book value of 8.5. This is higher than its average historical valuations.

Moreover, while the stock has generated a return of 12.87% in the past year, its profits have only risen by 3%, resulting in a high PEG ratio of 12.9. Lastly, ITC has underperformed the market in the last year, with a return of 12.87% compared to the market's (BSE 500) return of 38.03%.

In conclusion, while ITC has received a 'Buy' rating from MarketsMOJO, investors should carefully consider the risks and do their own research before making any investment decisions.