Stock Price Movement and Market Context
Compucom Software's stock has touched its lowest level in the past year, with the 52-week low price recorded at ₹31. This marks a notable shift from its previous highs and places the stock below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Such positioning indicates sustained downward momentum over multiple time frames.
On the day of this report, the stock's price movement was in line with its sector, registering a day change of -0.91%. The broader market, represented by the Nifty index, closed marginally lower at 25,815.55, down by 3 points or 0.01%. The Nifty remains approximately 1.98% below its own 52-week high of 26,325.80, while the index has experienced a three-week consecutive decline, losing 1.48% over that period.
Mid-cap stocks have shown relative strength, with the Nifty Midcap 100 gaining 0.34% on the same day, contrasting with the subdued performance of Compucom Software and its sector peers.
Financial Performance and Valuation Metrics
Over the last year, Compucom Software's stock has recorded a return of -43.97%, significantly underperforming the Sensex, which has shown a positive return of 5.36% during the same period. This divergence underscores the stock's relative weakness within the broader market context.
Despite the stock's decline, the company has reported a rise in profits, with net profit after tax (PAT) for the latest six months reaching ₹2.03 crores. This figure reflects a positive trend in earnings over the recent half-year period.
However, the company's long-term growth rate for operating profit has been measured at an annual rate of 19.50% over the past five years, which may be considered modest within the sector. The return on equity (ROE) stands at 2.3%, indicating limited profitability relative to shareholder equity.
Valuation metrics show a price-to-book value of 0.9, suggesting that the stock is trading close to its book value and is fairly valued compared to historical averages of its peers. The price-to-earnings-to-growth (PEG) ratio is 0.4, reflecting the relationship between the company's earnings growth and its valuation.
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Debt and Shareholding Structure
Compucom Software maintains a low average debt-to-equity ratio of 0.01 times, indicating minimal reliance on borrowed funds for its capital structure. This conservative approach to leverage may provide some stability amid market volatility.
The majority of the company's shares are held by promoters, reflecting concentrated ownership. This structure often implies a degree of control and influence over corporate decisions by the promoter group.
Comparative Performance and Sectoral Positioning
When compared to the BSE500 index, Compucom Software has underperformed over multiple time frames, including the last three years, one year, and three months. This consistent underperformance relative to a broad market benchmark highlights challenges in maintaining competitive momentum.
The stock's valuation remains in line with its peers' historical averages, yet its returns have lagged behind sector and market indices. This disparity suggests that while the stock may not be overvalued, its price action reflects investor caution or subdued sentiment.
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Technical Indicators and Market Sentiment
The stock's position below all major moving averages signals a prevailing bearish trend in the near to medium term. Such technical indicators often reflect investor sentiment and trading behaviour, which currently appear cautious towards Compucom Software.
In contrast, the broader market shows mixed signals, with mid-cap stocks gaining ground while large-cap indices like the Nifty experience slight declines. This divergence may indicate sector-specific or company-specific factors influencing Compucom Software's performance.
Overall, the stock's recent low price level is a culmination of its relative underperformance, valuation considerations, and market dynamics within the Other Consumer Services sector.
Summary of Key Metrics
To summarise, Compucom Software's stock has reached ₹31, its lowest price in 52 weeks, with a one-year return of -43.97%. The company reported a PAT of ₹2.03 crores in the latest six months and maintains a low debt-to-equity ratio of 0.01. Its ROE stands at 2.3%, and the price-to-book value is 0.9. The stock trades below all major moving averages, reflecting subdued momentum.
These factors collectively illustrate the current state of Compucom Software's market standing and financial profile amid ongoing market conditions.
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