COSYN Receives 'Hold' Rating from MarketsMOJO After Strong Q1 Results

COSYN, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the first quarter of 2024, with its PBDIT, PBT less OI, and PAT reaching their highest levels at Rs 1.16 crore, Rs 0.92 crore, and Rs 0.82 crore respectively.
The stock is currently in a bullish range, with its technical trend improving from mildly bullish on July 1, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, are contributing to the stock's bullish trend.

The majority shareholders of COSYN are its promoters, indicating their confidence in the company's future prospects. However, the company's long-term fundamental strength is weak, with a -34.27% CAGR growth in operating profits over the last 5 years. Additionally, its ability to service its debt is poor, with a low EBIT to Interest ratio of 0.10. The company's return on equity is also low at 1.83%, indicating low profitability per unit of shareholders' funds.

With a ROE of 0.1, COSYN's valuation is considered very expensive, with a price to book value of 1.2. The stock is currently trading at a premium compared to its average historical valuations. In the past year, while the stock has generated a return of 20.03%, its profits have declined by -22%.

Overall, COSYN has underperformed the market in the last year, with a return of 20.03% compared to the BSE 500's return of 37.64%. Investors are advised to hold onto their positions in the stock, as it shows potential for future growth but also has some weaknesses that need to be monitored.