R Systems International downgraded to 'Sell' by MarketsMOJO due to flat results and low mutual fund interest

R Systems International, a midcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on September 30, 2024. This downgrade is based on the company's flat results in June 2024, with a decrease of 24.5% in its PAT(Q) at Rs 24.88 crore. Additionally, the company's CASH AND CASH EQUIVALENTS(HY) have also decreased to the lowest at Rs 171.94 crore. The PBT LESS OI(Q) has also fallen by 5.6% at Rs 42.56 crore.
Despite being a midcap company, R Systems International has not gained much interest from domestic mutual funds, with only 0% of the company's shares being held by them. This could indicate that either the mutual funds are not comfortable with the current price of the stock or they have concerns about the company's business.

In the past year, the stock has underperformed the market (BSE 500) with negative returns of -5.01%, while the market has generated returns of 39.48%. This shows a significant underperformance by the stock.

On the positive side, R Systems International has a low Debt to Equity ratio (avg) of 0 times, indicating a healthy financial position. The company has also shown a healthy long-term growth with an annual rate of 55.32% in its operating profit.

However, the technical trend of the stock is currently sideways, with no clear price momentum. The stock has also been trading at a premium compared to its average historical valuations, with a Price to Book Value of 9.4. The ROE of the company is at 23.6, indicating a fair valuation. But, the PEG ratio of the company is 3.7, which is relatively high.

In conclusion, based on the recent downgrade by MarketsMOJO and the underperformance of the stock in the past year, it may be wise to consider selling R Systems International stock. However, the company's healthy financial position and long-term growth potential should also be taken into consideration before making any investment decisions.