MarketsMOJO Downgrades Nazara Technologies to 'Sell' Amidst Flat Results and Decrease in Promoter Confidence

Nazara Technologies, a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on October 23, 2024. This decision was based on several factors, including flat results in June 2024, a low ROCE (6.17%), and a decrease in PBT LESS OI(Q) by -12.1%. Additionally, the company's DEBTORS TURNOVER RATIO(HY) is at its lowest at 4.14 times.
The stock is currently trading at a discount compared to its average historical valuations, with a Price to Book Value of 3.3. While the stock has generated a return of 12.29% in the past year, its profits have only risen by 82.4%, resulting in a PEG ratio of 1.3.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -6.38% over the previous quarter. Currently, promoters hold only 10.05% of the company, which may indicate a lack of confidence in the future of the business.

In the last year, the stock has underperformed the market, generating a return of 12.29% compared to the market's (BSE 500) returns of 34.58%. However, the company has a low Debt to Equity ratio (avg) of 0 times, indicating a healthy financial position.

On a positive note, the company has shown healthy long-term growth with an annual growth rate of 31.83% in Net Sales and 185.70% in Operating profit. However, the technical trend for the stock is currently sideways, indicating no clear price momentum.

In conclusion, based on the recent downgrade and various factors, it may be wise to consider selling Nazara Technologies stock.