Recent Price Movement and Market Context
The stock has been on a consistent slide, losing value for five consecutive trading sessions and delivering a negative return of -7.54% during this period. Despite this, Nettlinx marginally outperformed its sector today by 0.27%. However, the broader market environment remains positive, with the Sensex opening 118.50 points higher and currently trading at 84,954.45, up 0.33%. The Sensex is also nearing its 52-week high, just 1.42% shy of 86,159.02, and is supported by bullish moving averages, with the 50-day moving average positioned above the 200-day moving average. Small-cap stocks are leading the market rally, with the BSE Small Cap index gaining 0.91% today.
Technical Indicators Reflect Weak Momentum
Nettlinx is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent bearish momentum. This technical positioning underscores the stock’s current weakness relative to its historical price levels and market benchmarks.
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Long-Term Performance and Valuation Metrics
Over the past year, Nettlinx has delivered a return of -77.82%, significantly underperforming the Sensex, which posted an 8.71% gain over the same period. The stock’s 52-week high was Rs.100, highlighting the steep decline to its current level. The company’s performance has also lagged behind the BSE500 index across one-year, three-year, and three-month timeframes.
From a valuation standpoint, Nettlinx presents a very attractive profile with a Return on Capital Employed (ROCE) of 2.7 and an enterprise value to capital employed ratio of 0.8. This suggests the stock is trading at a discount relative to its peers’ average historical valuations, despite the recent price weakness.
Financial Results and Profitability Concerns
The company has reported negative results for the last three consecutive quarters. For the nine months ended, net sales stood at Rs.20.24 crore, reflecting a decline of -23.16%. Correspondingly, the profit after tax (PAT) was negative at Rs.-1.31 crore, also down by -23.16%. The average Return on Equity (ROE) is 7.16%, indicating low profitability per unit of shareholders’ funds. Additionally, the debtors turnover ratio for the half-year is notably low at 0.13 times, which may point to challenges in receivables management.
Sector and Industry Positioning
Nettlinx operates within the Telecom - Services sector, which has seen mixed performance in recent times. While the broader market and small-cap segments have shown resilience, Nettlinx’s stock has not mirrored this trend, reflecting company-specific factors impacting investor sentiment and valuation.
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Rating and Market Capitalisation
MarketsMOJO assigns Nettlinx a Mojo Score of 17.0 and a Mojo Grade of Strong Sell, upgraded from Sell on 13 February 2025. The company’s market capitalisation grade is 4, reflecting its relatively modest size within the telecom services sector. The stock’s day change today was a marginal decline of -0.06%, consistent with its recent downward trajectory.
Shareholding and Corporate Structure
The majority shareholding in Nettlinx is held by promoters, indicating concentrated ownership. This structure often influences strategic decisions and long-term company direction.
Summary of Key Financial and Market Indicators
To summarise, Nettlinx Ltd’s stock has reached a new 52-week low of Rs.16, reflecting a significant decline from its peak of Rs.100 within the last year. The stock’s performance has been weak both in the short and long term, with negative returns and underperformance relative to major indices. Financial results have shown contraction in sales and losses over recent quarters, while valuation metrics suggest the stock is trading at a discount compared to peers. The company’s profitability ratios remain subdued, and technical indicators point to continued bearish momentum.
These factors collectively provide a comprehensive view of Nettlinx’s current market position and financial health as it navigates a challenging environment within the telecom services sector.
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