COSYN Receives 'Hold' Rating from MarketsMOJO After Positive Q1 Results

COSYN, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the first quarter of 2024, with its PBDIT, PBT less OI, and PAT reaching their highest levels at Rs 1.16 crore, Rs 0.92 crore, and Rs 0.82 crore respectively.
The stock is currently in a bullish range and its technical trend has improved from mildly bullish to bullish on July 18, 2024. This is supported by multiple factors such as MACD, Bollinger Band, and KST.

However, the company's majority shareholders are promoters, indicating a lack of diversity in ownership. In addition, COSYN has shown weak long-term fundamental strength with a -34.27% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also weak, with a poor EBIT to Interest ratio of 0.10.

Furthermore, the company's return on equity is only 1.83%, indicating low profitability per unit of shareholders' funds. With a ROE of 0.1, the stock is currently trading at a very expensive valuation with a price to book value of 1.2. It is also trading at a premium compared to its average historical valuations.

In the past year, while the stock has generated a return of 25.00%, its profits have fallen by -22%. This underperformance is also reflected in its returns compared to the market (BSE 500), which has seen a return of 36.87% in the same period.

Overall, while COSYN has shown positive results in the first quarter of 2024, its weak long-term fundamentals and expensive valuation make it a 'Hold' for now. Investors should keep an eye on the company's future performance before making any investment decisions.