⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ITI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.3
| Stock Code | ITI | Market Cap | 27,233 Cr. | Current Price | 283 ₹ | High / Low | 373 ₹ |
| Book Value | 15.1 ₹ | Dividend Yield | 0.00 % | ROCE | -1.33 % | ROE | -16.2 % |
| Face Value | 10.0 ₹ | DMA 50 | 302 ₹ | DMA 200 | 305 ₹ | Chg in FII Hold | 0.00 % |
| Chg in DII Hold | 0.00 % | PAT Qtr | -52.5 Cr. | PAT Prev Qtr | -59.7 Cr. | RSI | 38.0 |
| MACD | -5.91 | Volume | 7,52,418 | Avg Vol 1Wk | 9,88,622 | Low price | 233 ₹ |
| High price | 373 ₹ | Debt to equity | 0.90 | 52w Index | 35.5 % | Qtr Profit Var | 24.1 % |
| EPS | -1.97 ₹ | Industry PE | 42.4 |
📊 Core Financials
- Revenue & Profitability: PAT remains negative (-52.5 Cr. vs -59.7 Cr. QoQ), showing continued losses despite slight improvement.
- Margins: ROE at -16.2% and ROCE at -1.33% reflect poor efficiency and shareholder value erosion.
- Debt: Debt-to-equity ratio of 0.90 is moderate, but leverage risk remains high given negative earnings.
- Cash Flow: Dividend yield of 0.00% indicates no shareholder payout, reflecting weak cash generation.
💹 Valuation Indicators
- P/E Ratio: Not applicable due to negative EPS (-1.97 ₹).
- P/B Ratio: Current Price (283 ₹) / Book Value (15.1 ₹) ≈ 18.7, extremely expensive relative to book value.
- PEG Ratio: Not available, limiting growth-adjusted valuation analysis.
- Intrinsic Value: Current price appears significantly overvalued given persistent losses and weak fundamentals.
🏦 Business Model & Competitive Advantage
- ITI Limited operates in telecom and electronics manufacturing, backed by government support as a PSU.
- Competitive advantage lies in legacy presence and government contracts, but profitability and execution remain weak.
- Overall health is poor, with negative returns and high valuation multiples.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Safer entry below 240 ₹, closer to intrinsic value and support levels.
- Long-Term Holding: Risky for conservative investors due to persistent losses. Suitable only for speculative investors betting on turnaround or government-led revival.
✅ Positive
- Quarterly losses narrowed slightly (-52.5 Cr. vs -59.7 Cr.).
- Government backing provides some long-term support.
- Debt-to-equity ratio (0.90) is moderate compared to peers.
⚠️ Limitation
- Negative ROE (-16.2%) and ROCE (-1.33%) show poor efficiency.
- High P/B ratio (18.7) indicates extreme overvaluation.
- No dividend yield, limiting investor reward.
📉 Company Negative News
- Persistent quarterly losses continue to weigh on fundamentals.
- Stock trading below DMA 50 (302 ₹) and DMA 200 (305 ₹) indicates bearish technicals.
📈 Company Positive News
- Quarterly losses reduced marginally, showing slight improvement.
- Stable FII and DII holdings, with no major exits.
🏭 Industry
- Industry PE at 42.4 highlights strong valuations in telecom/electronics, but ITI lags due to losses.
- Sector growth driven by digital infrastructure and telecom expansion.
- Competition from private players with stronger profitability remains a challenge.
🔎 Conclusion
- ITI Limited remains fundamentally weak with negative returns and overvaluation.
- Government support provides some stability, but profitability must improve for sustainable growth.
- Best suited for speculative investors entering below 240 ₹, while conservative investors should avoid until fundamentals turn positive.
I can also prepare a comparative HTML report of ITI versus other telecom/electronics PSUs to highlight relative valuation and turnaround potential.