Netlink Solutions (India) Receives 'Hold' Rating After Consistent Positive Results

Netlink Solutions (India), a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company has consistently shown positive results for the past 5 quarters. In fact, their PBDIT(Q) has reached a high of Rs 1.24 crore, PBT LESS OI(Q) at Rs 1.19 crore, and PAT(Q) at Rs 4.50 crore.
The stock is currently in a bullish range and has shown a significant improvement in technical trends since April 22, 2024, with a return of 19.97%. Multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV have contributed to this bullish trend.

The majority shareholders of Netlink Solutions (India) are the promoters, indicating their confidence in the company's performance. In the long term, the stock has outperformed BSE 500 and has generated a return of 165.54% in the last year.

However, the company's long-term fundamental strength is weak, with a CAGR growth of only 20.21% in net sales over the last 5 years. Additionally, their ability to service debt is poor, with a negative EBIT to Interest (avg) ratio of -1.06. The Return on Capital Employed (avg) is also low at 0.85%, indicating low profitability per unit of total capital.

Despite a high ROE of 46.9, the stock is currently overvalued with a price to book value of 2.1. However, it is trading at a discount compared to its historical valuations. In the past year, while the stock has generated a return of 165.54%, its profits have only increased by 92.5%, resulting in a low PEG ratio of 0.1.

In conclusion, while Netlink Solutions (India) has shown positive results and a bullish trend in the short term, its long-term fundamental strength and valuation may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.