Silver Touch Technologies receives 'Hold' rating from MarketsMOJO based on positive financials and technical trend.

Silver Touch Technologies, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO on October 21, 2024. This upgrade is based on the company's low Debt to Equity ratio, positive financial results, and improved technical trend.
The company has shown a growth in Net Profit of 125.85% and has declared positive results for the last 8 consecutive quarters. Its PBT LESS OI(Q) has grown at 136.13% and PAT(Q) at 125.9%. Additionally, its ROCE(HY) is at a high of 18.57%. However, the technical trend is currently sideways, indicating no clear price momentum.

On the other hand, Silver Touch Technologies has a low Return on Equity (ROE) of 10.64%, indicating poor management efficiency and low profitability per unit of shareholders' funds. Its long-term growth has also been poor, with Net Sales growing at an annual rate of 28.11% and Operating profit at 57.41% over the last 5 years.

The stock is currently trading at a fair value compared to its historical valuations, with a Price to Book Value of 8. However, its ROE of 14.2 makes it an expensive valuation. In the past year, the stock has generated a return of 15.09%, while its profits have risen by 81.6%. The PEG ratio of the company is 0.6, indicating a relatively undervalued stock.

Despite being a microcap company, domestic mutual funds hold only 0% of the company, which could signify their discomfort with the price or the business. In the last 1 year, the stock has underperformed the market (BSE 500) with a return of 15.09%, compared to the market's return of 34.48%.

In conclusion, while Silver Touch Technologies has shown positive financial results and a low Debt to Equity ratio, its poor management efficiency and underperformance in the market may make it a risky investment. Investors are advised to hold onto their current positions and monitor the company's performance closely.