XT Global Infotech Receives 'Hold' Rating, But Long-Term Growth Remains Poor

XT Global Infotech, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO on November 27, 2024. This upgrade is based on the company's technical trend, which has improved from sideways to mildly bullish on November 25, 2024. Additionally, the key technical factor, KST, has been bullish since November 25, 2024.
Despite the recent upgrade, the company's long-term growth has been poor, with operating profit growing at an annual rate of -9.88% over the last 5 years. In the past year, the stock has generated a return of -11.24%, while its profits have fallen by -19.8%. However, with a ROCE of 6.4, the company has an attractive valuation and a 2.9 enterprise value to capital employed.

Furthermore, the company has declared negative results for the last 3 consecutive quarters, with PAT(HY) at Rs 4.88 crore growing at -21.16% and ROCE(HY) at its lowest at 8.21%. The net sales for the last quarter were also at its lowest at Rs 48.74 crore.

Despite its small size, domestic mutual funds hold only 0.01% of the company, which could indicate that they are not comfortable with the price or the business. This is significant as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, XT Global Infotech has underperformed the market, with the BSE 500 generating returns of 28.06%, while the stock has generated negative returns of -11.24%. This could be a cause for concern for investors.

Overall, while the recent upgrade to 'Hold' by MarketsMOJO may be a positive sign for XT Global Infotech, the company's poor long-term growth and underperformance in the market may warrant caution for potential investors.