Data Patterns (India) Downgraded to 'Sell' by MarketsMOJO on Negative Results.

Data Patterns (India), a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 20, 2024. This decision was based on the company's negative results in the June 2024 quarter, after two consecutive positive quarters. The PBT LESS OI(Q) has fallen by 36.5%, while the PAT(Q) has fallen by 27.8%. Additionally, the INTEREST(HY) has grown by 30.57%.
The company's ROE of 14.2 indicates a very expensive valuation with a 10.8 Price to Book Value. It is also trading at a premium compared to its average historical valuations. Despite generating a return of 22.89% in the past year, the stock's profits have only risen by 39.2%, resulting in a PEG ratio of 1.9. This underperformance in the market is evident as the stock has generated a lower return of 22.89% compared to the market's (BSE 500) return of 37.95%.

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

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has deteriorated from Mildly Bullish on September 20, 2024, and has only generated a return of 0.79% since then.

It is worth noting that 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, Data Patterns (India) has been downgraded to a 'Sell' due to its negative results and expensive valuation. While the company has shown healthy long-term growth, the stock's performance has been underwhelming in the past year. Investors should carefully consider these factors before making any investment decisions.