AXISCADES Technologies downgraded to 'Hold' by MarketsMOJO, but still shows strong fundamentals

AXISCADES Technologies, a smallcap IT software company, has recently been downgraded to a 'Hold' by MarketsMOJO on September 2, 2024. This decision was based on various factors such as the company's high management efficiency with a ROCE of 15.34%, its strong ability to service debt with a low Debt to EBITDA ratio of 0.84 times, and its healthy long-term growth with an annual operating profit growth rate of 47.80%.
Moreover, the company has declared positive results in June 2024 after four consecutive negative quarters. It also has a high Operating Profit to Interest (Q) ratio of 3.88 times and a significant amount of cash and cash equivalents of Rs 152.86 crore. Additionally, its PBT less OI (Q) has grown at a rate of 29.4%.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The stock has also underperformed the market in the last year, generating a return of 16.29% while its profits have fallen by -20.6%. This could be attributed to the falling participation of institutional investors, who have decreased their stake by -4.04% in the previous quarter.

Despite these factors, AXISCADES Technologies still has an attractive valuation with a ROCE of 13.8 and a 4 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, it is important to note that the company is among the highest 1% of companies rated by MarketsMojo across all 4,000 stocks, indicating its strong fundamentals.