ITI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're asking for a full-spectrum fundamental analysis of ITI Ltd, with a numeric rating and strategic investment guidance. I’ve weighed profitability, capital efficiency, valuation, and business durability, and factored in recent performance trends and technical indicators as of September 2025.

📊 Fundamental Analysis of ITI Ltd

🔍 Core Financials

Profitability

PAT Qtr: -₹59.7 Cr vs -₹67.3 Cr — losses narrowing, but still negative.

EPS: -₹2.14 — negative, indicating continued earnings pressure.

ROE: -16.2%, ROCE: -1.33% — poor capital efficiency, signaling structural challenges.

Leverage & Liquidity

Debt-to-equity: 0.94 — moderately high, but not excessive for a telecom PSU.

Dividend Yield: 0.00% — no payouts, reinvestment-focused.

Cash Flow & Stability

Losses have narrowed QoQ, but consistent profitability remains elusive.

Book value: ₹16.4 vs current price of ₹317 — extremely high P/B ratio (~19.3), suggesting speculative valuation.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio N/A Not meaningful due to negative earnings

P/B Ratio ~19.3 Extremely high — not justified by fundamentals

PEG Ratio N/A Not applicable due to negative EPS

Intrinsic Value ~₹180–₹200 Well below current price — significantly overvalued

📡 Business Model & Competitive Edge

Segment Focus: Telecom equipment, defense electronics, and turnkey network projects.

Moat: Legacy PSU status, strategic government contracts, and infrastructure footprint.

Growth Drivers

Revival hopes tied to 5G rollout and defense modernization.

Government support and potential restructuring could unlock value.

Technical momentum suggests short-term trading interest, not long-term conviction.

📈 Technical & Entry Guidance

Current Price: ₹317

DMA 50/200: ₹306 / ₹299 — trading above both, indicating bullish momentum.

RSI: 57.7 — neutral to mildly bullish.

MACD: 4.89 — positive crossover.

🎯 Entry Zone

Ideal Buy Range: ₹270–₹290 — only for speculative traders.

Stop Loss: ₹250

Target: ₹360–₹380 in short term (momentum-based)

🕰️ Long-Term Holding Outlook

Avoid fresh long-term entry unless there's a clear turnaround in earnings.

Hold only if speculative: Momentum may drive short-term gains, but fundamentals remain weak.

Growth Triggers: Government contracts, telecom capex, and restructuring announcements.

⭐ Fundamental Rating

2.8

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