ITI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.4
| Stock Code | ITI | Market Cap | 27,980 Cr. | Current Price | 291 ₹ | High / Low | 373 ₹ |
| Book Value | 15.1 ₹ | Dividend Yield | 0.00 % | ROCE | -1.33 % | ROE | -16.2 % |
| Face Value | 10.0 ₹ | DMA 50 | 300 ₹ | 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 | 46.0 |
| MACD | -5.07 | Volume | 3,16,049 | Avg Vol 1Wk | 5,08,908 | Low price | 233 ₹ |
| High price | 373 ₹ | Debt to equity | 0.90 | 52w Index | 41.2 % | Qtr Profit Var | 24.1 % |
| EPS | -1.97 ₹ | Industry PE | 42.5 |
📊 ITI shows weak fundamentals for long-term investment. ROE at -16.2% and ROCE at -1.33% reflect poor efficiency and negative returns. EPS is negative (-1.97 ₹), and quarterly PAT remains in losses (-52.5 Cr.), though marginally improved from -59.7 Cr. The debt-to-equity ratio of 0.90 indicates moderate leverage. Dividend yield is 0%, offering no income support. Current price (291 ₹) is below both DMA 50 (300 ₹) and DMA 200 (305 ₹), showing weak momentum. RSI at 46.0 reflects neutral conditions, while MACD at -5.07 indicates bearish sentiment. Valuations are unclear due to absence of P/E, but industry PE is 42.5, suggesting ITI is not comparable on earnings basis.
💡 Ideal Entry Zone: 230 ₹ – 260 ₹ (aligned with support levels and risk-adjusted valuation comfort).
📈 Exit / Holding Strategy: If already holding, consider short- to medium-term holding only if profitability turns positive and ROE improves above 8%. Exit near 330–350 ₹ resistance if recovery momentum does not sustain. Long-term holding is risky given persistent losses and weak fundamentals.
Positive
- 📌 Quarterly PAT loss narrowed (from -59.7 Cr. to -52.5 Cr.).
- 📌 Debt-to-equity ratio of 0.90 is manageable compared to peers.
- 📌 Technical support exists near 233 ₹ (52-week low).
Limitation
- ⚠️ ROE at -16.2% and ROCE at -1.33% are negative.
- ⚠️ EPS at -1.97 ₹ reflects weak earnings.
- ⚠️ Dividend yield at 0% offers no income support.
- ⚠️ Price below DMA 50 and DMA 200 indicates weak momentum.
Company Negative News
- ❌ Persistent quarterly losses despite marginal improvement.
- ❌ No dividend payout, limiting investor returns.
Company Positive News
- ✅ Loss reduction quarter-on-quarter shows slight recovery trend.
- ✅ Stable institutional holding (no major FII/DII exits).
Industry
- 🏭 Industry PE at 42.5 highlights strong sector valuations, but ITI cannot be compared due to negative earnings.
- 🏭 Telecom and technology infrastructure sector supported by government initiatives, but ITI’s execution remains weak.
Conclusion
🔎 ITI is currently a weak candidate for long-term investment due to negative ROE/ROCE, persistent losses, and lack of dividend yield. Best suited for speculative investors who can accumulate near 230–260 ₹ and exit near 330–350 ₹ if recovery momentum sustains. Long-term holding is not advisable unless profitability improves significantly.