Kretto Syscon Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Kretto Syscon, a microcap healthcare services company, has recently received a 'Sell' rating from MarketsMOJO on July 26, 2024. This downgrade is based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 0.95%. Additionally, the company has shown poor long-term growth, with net sales and operating profit growing at an annual rate of 8.73% and 9.86%, respectively, over the last 5 years.
One of the major concerns for Kretto Syscon is its ability to service its debt, as indicated by a poor EBIT to Interest (avg) ratio of -0.25. Furthermore, with a ROE of 5.5, the company's valuation is considered to be very expensive, with a price to book value of 0.9. However, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, Kretto Syscon's stock has generated a return of 82.69%, while its profits have only risen by 71%. This has resulted in a PEG ratio of 0, indicating that the stock may be overvalued. On a positive note, the company has shown strong results in the quarter ending June 24, with its PBDIT(Q), PBT LESS OI(Q), and PAT(Q) reaching their highest levels at Rs 0.56 cr, Rs 0.57 cr, and Rs 0.68 cr, respectively.

From a technical standpoint, the stock is currently in a mildly bullish range, with both the MACD and KST technical factors showing a bullish trend. It is also worth noting that the majority of the company's shareholders are non-institutional investors.

Overall, while Kretto Syscon may have shown some positive results in the recent quarter, its weak long-term fundamentals and expensive valuation make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.