C.E. Info Systems Downgraded to 'Sell' by MarketsMOJO After Negative Results and Expensive Valuation

C.E. Info Systems, a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 11, 2024. This downgrade comes after the company reported negative results in September 2024, breaking a streak of 9 consecutive positive quarters. The company's ROCE (HY) has also decreased to a low of 23.59%, while its PBT LESS OI(Q) and PAT(Q) have both fallen by -10.9% and -11.8%, respectively.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a price to book value of 14.1 and a ROE of 18.5. This is significantly higher than its average historical valuations. Additionally, the stock has underperformed the market (BSE 500) in the last year, generating negative returns of -8.28% while the market has seen a return of 30.30%. This has resulted in a high PEG ratio of 8.5 for the company.

Another concerning factor is the decreasing stake of promoters in the company, which has gone down by -0.93% in the previous quarter. This could indicate a lack of confidence in the future of the business. However, the company does have a high management efficiency with a ROE of 20.05% and a low debt to equity ratio of 0 times.

In terms of long-term growth, C.E. Info Systems has shown promising results with an annual growth rate of 32.77% in net sales. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated since November 11, 2024, when it was mildly bullish, resulting in -8.47% returns.

Overall, the downgrade to 'Sell' by MarketsMOJO highlights the current challenges and concerns for C.E. Info Systems. Investors should carefully consider these factors before making any decisions regarding the stock.