ITL Industries downgraded to 'Hold' by MarketsMOJO, but shows positive Q1 results

ITL Industries, a microcap engineering company, has recently been downgraded to a 'Hold' by MarketsMOJO on June 5th, 2024. This decision was based on the company's low Debt to Equity ratio of 0.31 times, indicating a stable financial position.
However, the company has shown positive results in the first quarter of 2024, with its ROCE (HY) reaching a high of 16.10% and its net sales and PAT also reaching their highest at Rs 48.19 crore and Rs 3.26 crore respectively. This is a positive sign for the company's performance.

Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROCE of 11.9, the company has an attractive valuation with a 1.7 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 78.26%, outperforming the BSE 500. Its profits have also increased by 18.8%, resulting in a PEG ratio of 0.7. The majority shareholders of the company are non-institutional investors.

While the company has shown market-beating performance in the long term as well as the near term, its long-term growth has been poor with net sales growing at an annual rate of 6.47% and operating profit at 8.16% over the last 5 years. This is something investors should keep in mind while considering their investment in ITL Industries. Overall, the stock is currently a 'Hold' based on its financials and technical factors.