Silver Touch Technologies Receives 'Buy' Rating from MarketsMOJO for Strong Financial Performance.

Silver Touch Technologies, a microcap IT software company, has recently received a 'Buy' rating from MarketsMOJO. This upgrade comes as the company has shown strong financial performance and positive results in the past few quarters.
One of the key factors contributing to the 'Buy' rating is the company's low Debt to Equity ratio, which is at 0 times on average. This indicates a strong financial position and stability for the company. Additionally, Silver Touch Technologies has shown a growth in Net Sales of 79.34% and has declared positive results for the last 7 consecutive quarters. This is a testament to the company's consistent performance and growth.

The company's ROCE (HY) is also at a high of 18.57%, showcasing its efficient use of capital. Furthermore, the PBT LESS OI (Q) has grown at an impressive rate of 70.62%, with the highest NET SALES (Q) at Rs 78.80 crore. These numbers reflect the company's strong financial performance and potential for growth.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement in its trend from mildly bullish to bullish on 31-Jul-24. The Bollinger Band and OBV technical factors also indicate a bullish trend for the stock.

In terms of market performance, Silver Touch Technologies has outperformed the market (BSE 500) with a return of 96.64% in the last year, compared to the market's return of 37.33%. This showcases the company's market-beating performance and potential for future growth.

However, there are some risks associated with investing in Silver Touch Technologies. The company has a low ROE of 7.82%, indicating poor management efficiency and profitability per unit of shareholders' funds. Additionally, the company has shown poor long-term growth with a low annual growth rate of 0.40% for Net Sales and -0.25% for Operating profit over the last 5 years.

Furthermore, the stock is currently trading at an expensive valuation with a Price to Book Value of 8.6, which is higher than its historical average. However, it is still trading at a discount compared to its average historical valuations. The PEG ratio of the company is also at 0.8, indicating that the stock may be slightly overvalued.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, Silver Touch Technologies has shown strong financial performance and has received a 'Buy' rating from MarketsMOJO. However, investors should also consider the risks associated with the stock before making any investment decisions.