Response Informatics Ltd is Rated Sell

Current Rating and Its Significance

The 'Sell' rating assigned to Response Informatics Ltd indicates a cautious stance for investors, suggesting that the stock may underperform relative to the broader market or its sector peers in the near term. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential.

Quality Assessment

As of 26 December 2025, Response Informatics Ltd exhibits below-average quality metrics. The company’s long-term fundamental strength remains weak, with an average Return on Equity (ROE) of just 6.76%. This level of ROE suggests limited efficiency in generating profits from shareholders’ equity compared to industry standards. Additionally, the company’s ability to service its debt is concerning, with an average EBIT to Interest ratio of 0.45, indicating that earnings before interest and taxes are insufficient to comfortably cover interest expenses. Such financial strain can limit operational flexibility and increase risk for investors.

Valuation Perspective

Despite the quality concerns, the valuation of Response Informatics Ltd is currently very attractive. The stock trades at levels that may appeal to value-oriented investors seeking bargains in the software products sector. This valuation attractiveness stems from the market pricing in the company’s challenges, reflected in its microcap status and subdued market capitalisation. However, investors should weigh this against the company’s fundamental weaknesses and the broader market context before considering entry.

Financial Trend Analysis

The financial trend for Response Informatics Ltd is currently flat, reflecting a lack of significant growth or deterioration in recent periods. The latest six months’ net sales stand at ₹12.98 crores, representing a decline of 30.85% compared to previous periods. This contraction in sales highlights challenges in revenue generation and market demand. Furthermore, the company’s recent quarterly results for September 2025 were largely stagnant, offering little indication of an imminent turnaround.

Technical Outlook

From a technical perspective, the stock shows mildly bullish signals, suggesting some short-term positive momentum. However, this technical optimism is tempered by the stock’s overall performance, which has been disappointing over the past year. As of 26 December 2025, Response Informatics Ltd has delivered a negative return of 40.63% over the last 12 months, significantly underperforming the BSE500 index, which has generated a positive return of 5.68% in the same period. This underperformance underscores the challenges faced by the company and the cautious stance reflected in the 'Sell' rating.

Stock Performance Overview

Examining shorter-term price movements, the stock has experienced volatility with a 5.00% decline on the most recent trading day and a 10.26% drop over the past week. The one-month return is down by 3.17%, though there was a notable 20.91% gain over the past three months. Despite this brief rally, the six-month return remains negative at 14.48%, and the year-to-date performance is down 38.29%. These figures illustrate the stock’s uneven trajectory and the risks associated with investing at this juncture.

Implications for Investors

For investors, the 'Sell' rating on Response Informatics Ltd serves as a cautionary signal. While the stock’s valuation may appear attractive, the underlying quality concerns, flat financial trends, and recent underperformance suggest that the company faces significant headwinds. Investors should carefully consider these factors and their own risk tolerance before initiating or maintaining positions in this stock. The mildly bullish technical signals may offer short-term trading opportunities, but the broader fundamental challenges warrant a conservative approach.

Summary

In summary, Response Informatics Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 18 Nov 2025, reflects a balanced assessment of its present-day fundamentals as of 26 December 2025. The company’s below-average quality, very attractive valuation, flat financial trend, and mildly bullish technicals combine to form a cautious outlook. Investors should remain vigilant and monitor developments closely, especially given the stock’s recent underperformance relative to the broader market.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →