Kretto Syscon Receives 'Hold' Rating from MarketsMOJO After Positive Q2 Results

Kretto Syscon, a microcap healthcare services company, has recently received a 'Hold' rating from MarketsMOJO on July 19, 2024. This upgrade comes after the company reported positive results in the quarter ending June 2024. The company's PBDIT(Q) reached its highest at Rs 0.56 crore, while PBT LESS OI(Q) and PAT(Q) also saw significant increases, reaching their highest at Rs 0.57 crore and Rs 0.68 crore respectively.
The stock is currently in a bullish range, with technical indicators such as MACD, Bollinger Band, and KST showing positive trends. However, the majority of shareholders are non-institutional, indicating a weaker long-term fundamental strength for the company. Its average ROE stands at 0.95%, and the net sales and operating profit have only grown at an annual rate of 8.73% and 9.86% respectively over the last 5 years.

Furthermore, Kretto Syscon's ability to service its debt is weak, with a poor EBIT to Interest (avg) ratio of -0.25. The company also has a very expensive valuation, with a price to book value of 0.9 and a PEG ratio of 0. However, the stock is currently trading at a discount compared to its average historical valuations.

Despite generating a return of 86.79% over the past year, the company's profits have only risen by 71%, indicating a potential overvaluation. Therefore, MarketsMOJO has upgraded the stock to a 'Hold' rating, suggesting a cautious approach for investors.