MarketsMOJO Upgrades Nazara Technologies to 'Hold' Based on Strong Growth and Financial Position

MarketsMOJO has recently upgraded its stock call on Nazara Technologies to 'Hold' based on various factors. The company, which operates in the IT software industry and is classified as a midcap, has shown a healthy long-term growth with an annual increase of 31.83% in net sales and 185.70% in operating profit. Additionally, the company has a low debt to equity ratio, indicating a strong financial position.
Technically, the stock is currently in a mildly bullish range and has shown improvement since November 6, 2024, with a return of -4.83%. The key technical factor, KST, has also been bullish since the same date.

One of the reasons for the upgrade is the high institutional holdings of 21.92%. These investors have better resources and capabilities to analyze the fundamentals of companies, making their investment decisions more reliable.

However, the company's results for June 2024 were flat, with the lowest ROCE (HY) at 6.17% and a decrease of -12.1% in PBT LESS OI (Q) at Rs 8.46 crore. The DEBTORS TURNOVER RATIO (HY) was also at its lowest at 4.14 times.

With an ROE of 4.4, the company has an expensive valuation with a price to book value of 3.5. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 10.08%, its profits have increased by 82.4%, resulting in a PEG ratio of 1.3.

In the last year, the stock has underperformed the market, with a return of 10.08% compared to the market's (BSE 500) return of 30.30%. This could be a factor in the 'Hold' rating given by MarketsMOJO. Investors should carefully consider these factors before making any investment decisions regarding Nazara Technologies.