Data Patterns (India) Upgraded to 'Hold' Rating by MarketsMOJO Based on Strong Financials and Technical Trends

Data Patterns (India), a midcap IT software company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This decision is based on the company's current financial standing and technical trends.
One of the key factors contributing to this upgrade is the company's low Debt to Equity ratio, which is at 0 times on average. This indicates a healthy financial position and the ability to manage debt effectively.

In terms of long-term growth, Data Patterns has shown promising results with an annual growth rate of 24.98% in Net Sales and 63.06% in Operating profit. The stock is also currently in a Mildly Bullish range, with technical trends improving since 23-Sep-24 and generating a return of -2.04%.

Moreover, the company has a high institutional holding of 23.47%, indicating that these investors have the resources and capability to analyze the company's fundamentals.

However, Data Patterns did report negative results in Jun'2024 after two consecutive positive quarters. The PBT LESS OI(Q) has fallen by -36.5%, while the PAT(Q) has fallen by -27.8%. On the other hand, the INTEREST(HY) has grown by 30.57%.

With a ROE of 14.2, the company has a Very Expensive valuation with a 10.6 Price to Book Value. This means that the stock is trading at a premium compared to its historical valuations. Additionally, while the stock has generated a return of 21.50% in the past year, its profits have only risen by 39.2%, resulting in a PEG ratio of 1.9.

It is also worth noting that Data Patterns has underperformed the market in the last year, with a return of 21.50% compared to the market's (BSE 500) return of 40.34%. This could be a cause for concern for potential investors.

In conclusion, while Data Patterns (India) has shown strong growth potential in the past, its current financial standing and technical trends suggest a 'Hold' rating. Investors should carefully consider these factors before making any investment decisions.