Ram Info Ltd Downgraded to Strong Sell Amid Mixed Financial and Technical Signals

Financial Trend: Positive Yet Limited

Ram Info’s financial performance for the quarter ended December 2025 showed encouraging signs, with net sales for the latest six months surging by 140.86% to ₹19.63 crores. The company reported its highest quarterly PBDIT at ₹1.53 crores and an operating profit margin of 19.62%, the best in recent periods. Profit before tax excluding other income reached ₹0.58 crores, while PAT stood at ₹0.99 crores, with earnings per share hitting a peak of ₹1.21.

Despite these positive quarterly results, the overall financial trend score has declined from 21 to 18 over the past three months, reflecting a moderation from very positive to merely positive. A key concern remains the company’s return on capital employed (ROCE), which is at a low 3.18% for the half-year, indicating suboptimal capital efficiency. This weak ROCE contrasts sharply with the company’s operational gains and weighs heavily on the financial grade.

Valuation: From Fair to Risky

The valuation profile of Ram Info has deteriorated, with its grade shifting from fair to risky. The stock currently trades at a price-to-earnings (PE) ratio of 24.43, which is elevated relative to its peers and historical averages. The price-to-book value stands at a modest 0.79, but other valuation metrics paint a more concerning picture. The enterprise value to EBITDA ratio is 9.18, while the EV to EBIT is negative at -31.77, reflecting losses or irregular earnings in certain periods.

Return on equity (ROE) is a mere 2.14%, and the latest ROCE is negative at -2.42%, underscoring weak profitability. The PEG ratio of 0.87 suggests that earnings growth is not sufficiently robust to justify the current valuation. Compared to industry peers such as InfoBeans Technologies and Blue Cloud Software, which are classified as expensive or very expensive, Ram Info’s valuation remains risky given its inconsistent financial performance and subdued returns.

Technical Indicators: Bearish Momentum Prevails

Technically, Ram Info’s outlook has worsened, with the technical trend downgraded from mildly bearish to bearish. Key momentum indicators such as the Moving Average Convergence Divergence (MACD) are bearish on both weekly and monthly charts. The Relative Strength Index (RSI) shows no clear signal, but Bollinger Bands indicate bearishness weekly and mild bearishness monthly.

Daily moving averages remain bearish, and the Know Sure Thing (KST) indicator is bearish weekly, though mildly bullish monthly. Dow Theory analysis reveals no clear weekly trend and a mildly bearish monthly trend. These mixed but predominantly negative signals suggest that the stock is under selling pressure, with limited technical support for a near-term rebound.

Quality Assessment: Weak Long-Term Fundamentals

Ram Info’s quality rating remains poor, reflected in its Mojo Score of 17.0 and a Mojo Grade of Strong Sell, downgraded from Sell. The company’s long-term fundamental strength is weak, with a negative compound annual growth rate (CAGR) of -0.81% in operating profits over the last five years. This persistent underperformance is compounded by the stock’s consistent lag behind the benchmark indices such as the Sensex and BSE500.

Over the past year, Ram Info’s stock price has declined by 9.33%, while the Sensex gained 9.66%. Over three years, the stock has plummeted 40.19%, contrasting with a 35.81% rise in the Sensex. Even over five and ten years, despite positive absolute returns of 109.88% and 142.42% respectively, the stock has underperformed the broader market, which returned 59.83% and 259.08% in the same periods.

Shareholding and Market Context

The majority of Ram Info’s shares are held by non-institutional investors, which may contribute to higher volatility and less stable demand. The stock’s 52-week high was ₹129.00, while the low was ₹56.00, with the current price hovering near ₹68.00. On 17 Feb 2026, the stock declined 3.98% to close at ₹68.00 from the previous close of ₹70.82, reflecting investor caution amid the downgrade.

Investment Implications

While Ram Info has demonstrated some operational improvements in the recent quarter, the overall investment case remains weak. The downgrade to Strong Sell reflects concerns over valuation risks, deteriorating technical momentum, and poor long-term fundamental quality. Investors should note the company’s inability to generate consistent returns above benchmark indices and its low capital efficiency as measured by ROCE and ROE.

Given the stock’s risky valuation metrics and bearish technical indicators, the outlook suggests limited upside potential in the near term. The company’s positive quarterly sales growth and profit margins are encouraging but insufficient to offset the broader concerns. Market participants are advised to exercise caution and consider alternative opportunities within the sector or broader market that offer stronger fundamentals and more favourable technical setups.

Comparative Sector and Market Performance

Within the Computers - Software & Consulting sector, Ram Info’s valuation and performance lag behind peers such as Orient Technologies and Expleo Solutions, which are rated as attractive investments with lower PE ratios and healthier profitability metrics. The company’s PEG ratio of 0.87 indicates modest earnings growth relative to price, but this is overshadowed by weak returns on capital and negative operating profit trends over the medium term.

Ram Info’s underperformance against the Sensex and BSE500 over multiple time horizons highlights the challenges it faces in delivering shareholder value. The stock’s 1-month return of 1.64% slightly outpaces the Sensex’s -0.35%, but this short-term gain is insufficient to reverse the negative sentiment built over longer periods.

Conclusion

In summary, Ram Info Ltd’s downgrade to Strong Sell is driven by a combination of deteriorating valuation metrics, bearish technical signals, and weak long-term fundamental quality despite some recent financial improvements. The company’s operational gains in sales and profits are overshadowed by poor capital efficiency and consistent underperformance relative to market benchmarks. Investors should approach the stock with caution and consider reallocating capital to more robust opportunities within the sector or broader market.

Unlock special upgrade rates for a limited period. Start Saving Now →