Data Patterns (India) Downgraded to 'Sell' After Negative Results in June Quarter

Data Patterns (India), a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO. This decision was made after the company reported negative results in the June 2024 quarter, following two consecutive positive quarters. The PBT LESS OI(Q) has fallen by 36.5% and the PAT(Q) has fallen by 27.8%, while the INTEREST(HY) has grown by 30.57%.
The stock is currently in a Mildly Bearish range and the technical trend has deteriorated from Sideways on 30-Sep-24, resulting in a -2.69% return since then. Multiple factors, such as RSI, MACD, and Bollinger Band, are also indicating a bearish trend for the stock.

In terms of valuation, Data Patterns (India) has a ROE of 14.2 and a price to book value of 9.8, making it a very expensive stock. It is currently trading at a premium compared to its average historical valuations. While the stock has generated a return of 10.43% in the past year, its profits have only risen by 39.2%, resulting in a PEG ratio of 1.8.

Furthermore, the stock has underperformed the market (BSE 500) in the last year, with a return of only 10.43% compared to the market's 39.48% return.

On a positive note, Data Patterns (India) has a low Debt to Equity ratio (avg) of 0 times, indicating a healthy financial position. The company also has a strong long-term growth potential, with a 24.98% annual growth rate in Net Sales and a 63.06% growth rate in Operating profit.

Moreover, the company has a high institutional holding of 23.47%, which suggests that these investors have better capabilities and resources to analyze the fundamentals of the company compared to retail investors.

In conclusion, while Data Patterns (India) has shown some positive aspects, the recent downgrade to 'Sell' by MarketsMOJO and the bearish trend in technical indicators suggest caution for potential investors. It is important to carefully analyze all factors before making any investment decisions.