Tracxn Technologies Downgraded to 'Sell' by MarketsMOJO Due to Negative Results and Expensive Valuation

Tracxn Technologies, a microcap IT software company, has recently been downgraded to a 'Sell' by MarketsMOJO on March 6, 2024. This decision was based on the company's negative results in December 2023, with a -45.40% growth in PAT (HY) at Rs 4.39 crore and non-operating income (Q) accounting for 37.37% of PBT. Additionally, the company's ROE of 45.8 indicates a very expensive valuation with a 14.9 price to book value.
Furthermore, Tracxn Technologies has underperformed the market in the last year, with a return of only 22.88% compared to the BSE 500's return of 36.15%. This is also reflected in the decreasing stake of institutional investors, who hold 16.73% of the company and have decreased their stake by -4.25% in the previous quarter. However, the company has shown high management efficiency with a ROE of 27.72% and a low debt to equity ratio of 0 times.

Despite these factors, the company has a healthy long-term growth potential, with an annual growth rate of 216.02% in operating profit. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from mildly bullish on March 6, 2024, generating a -2.99% return since then.

Investors should carefully consider these factors before making any decisions regarding Tracxn Technologies stock. While the company has shown potential for growth, its current performance and valuation may not be favorable for investors. It is important to conduct thorough research and analysis before investing in any stock, especially in the volatile microcap industry.