NINtec Systems Downgraded to 'Hold' by MarketsMOJO, Despite Strong Growth and Returns

NINtec Systems, a smallcap IT software company, has recently been downgraded to a 'Hold' by MarketsMOJO on September 30, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times on average.
However, NINtec Systems has shown healthy long-term growth with an annual increase in Net Sales and Operating profit at 43.66%. In fact, the company declared outstanding results in June 2024 with a growth in Net Profit of 82.16%. This positive trend has been consistent for the last 4 consecutive quarters, with the highest NET SALES(Q) at Rs 20.64 cr, PBDIT(Q) at Rs 6.37 cr, and PBT LESS OI(Q) at Rs 5.93 cr.

Technically, the stock is currently in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV indicating a bullish trend.

NINtec Systems has also shown consistent returns over the last 3 years, outperforming BSE 500 in each of the last 3 annual periods. However, with a ROE of 44.4, the stock has a very expensive valuation with a 32.3 Price to Book Value.

In the past year, while the stock has generated a return of 71.89%, its profits have fallen by 0%. This could be a cause for concern for investors.

It is worth noting that despite its smallcap size, domestic mutual funds hold only 0% of the company. This could signify that either they are not comfortable with the current price or they have not conducted in-depth research on the company.

Overall, NINtec Systems has shown promising growth and consistent returns, but its expensive valuation and lack of interest from domestic mutual funds may be a cause for caution for potential investors.