CG-VAK Software & Exports Downgraded to 'Sell' by MarketsMOJO After Negative Financial Results

CG-VAK Software & Exports, a microcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on February 26, 2024. This downgrade is based on the company's negative results in December 2023, with a -32.86% growth in PAT (HY) at Rs 4.29 crore and the lowest ROCE (HY) at 25.24%. Additionally, the company's cash and cash equivalents (HY) have also decreased to the lowest at Rs 9.20 crore.
In the past year, CG-VAK Software & Exports has underperformed the market, generating a return of only 9.32%, compared to the market's (BSE 500) return of 37.63%. However, the company has shown high management efficiency with a ROE of 19.61% and a low debt to equity ratio (avg) of 0 times. Furthermore, the company has a healthy long-term growth potential, with an annual growth rate of 46.14% in operating profit.

The technical trend for CG-VAK Software & Exports is currently sideways, indicating no clear price momentum. The stock's technical trend has deteriorated from mildly bullish on February 26, 2024, and has generated -3.2% returns since then. With a ROE of 19.4, the stock is currently fairly valued with a price to book value of 3.5. However, it is trading at a premium compared to its average historical valuations.

It is worth noting that while the stock has generated a return of 9.32% in the past year, its profits have fallen by -18%. The majority shareholders of CG-VAK Software & Exports are the promoters, indicating their confidence in the company's future prospects. Overall, based on the recent downgrade and the company's financial performance, it may be wise for investors to consider selling their shares in CG-VAK Software & Exports.