MarketsMOJO upgrades Nazara Technologies to 'Hold' rating, shows strong growth potential

Nazara Technologies, a midcap IT software company, has recently received a 'Hold' rating from MarketsMOJO on October 28, 2024. This upgrade comes as the company has shown a low Debt to Equity ratio of 0 times, indicating a healthy financial position.

The company has also displayed a strong long-term growth potential with an annual growth rate of 31.83% in Net Sales and 185.70% in Operating profit. Additionally, the stock is currently in a Mildly Bullish range and the technical trend has improved from Sideways on October 28, 2024. The key technical factor, KST, has been Bullish since the same date.

One of the reasons for this upgrade is the high institutional holdings of 21.92%, which suggests that these investors have better capabilities and resources to analyze the fundamentals of the company compared to retail investors.

However, the company's results for June 2024 were flat, with the ROCE (HY) at its lowest at 6.17%. The PBT LESS OI (Q) has also fallen by -12.1% at Rs 8.46 crore. The DEBTORS TURNOVER RATIO (HY) is 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, the stock has generated a return of 14.11%, while its profits have risen by 82.4%. The PEG ratio of the company is 1.3.

In the last year, the stock has underperformed the market, with a return of 14.11%, much lower than the market (BSE 500) returns of 34.46%. Overall, while Nazara Technologies has shown potential for growth, it is currently recommended to be held in the portfolio.