TIL Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and High Debt.

TIL, a smallcap engineering company, has recently received a 'Sell' rating from MarketsMOJO. This downgrade is based on several factors that indicate a weak long-term fundamental strength for the company.
One of the main reasons for the 'Sell' rating is the high debt of TIL, with a debt-equity ratio of 5.09 times. This indicates a low ability to service debt, as seen by the high debt to EBITDA ratio of 3.65 times. Additionally, the company has a low return on equity of 1.39%, which shows a lack of profitability per unit of shareholders' funds.

The stock is also considered risky due to its negative EBITDA and trading at higher valuations compared to its historical average. While the stock has generated a return of 17.04% in the past year, its profits have only risen by 94%, indicating a potential overvaluation.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -8.48% in the previous quarter. This could suggest a lack of faith in the company's future prospects.

In the last year, TIL has underperformed the market, with a return of 17.04% compared to the BSE 500's return of 39.48%. However, the company has shown positive results in the last two consecutive quarters, with a growth in net sales of 1835.84%. The PAT (HY) is also higher at Rs 33.76 crore, and the net sales (Q) and PBDIT (Q) are at their highest levels at Rs 66.98 crore and Rs -4.74 crore, respectively.

From a technical standpoint, the stock is currently in a mildly bullish range, with the RSI and KST technical factors also showing a bullish trend. However, considering the overall weak fundamental strength and recent downgrade, investors may want to approach TIL with caution.