Dev Information Technology Reports 411.6% Profit Growth in Q2 FY24-25 Amid Stake Reduction Concerns

Mumbai, January 13, 2025: Dev Information Technology (DAT) has posted its strong financial performance for the second quarter of FY24-25, but the optimistic sentiment surrounding the stock has been undermined due to concerns over promoter confidence.

According to information released by the company on Wednesday, DAT reported a profit after tax of Rs 8.39 crore in Q2 FY24-25, representing a staggering growth of 411.6% compared to the same period last year.

Despite these impressive results, DAT's share price has been hit with a downgrade from a 'Buy' rating to a 'Hold' by MarketsMojo. This decision comes despite the company's excellent ability to manage its debt, which reflected in a low Debt to EBITDA ratio of 1.19 times.

The operating profit for DAT also witnessed significant growth, increasing at an annual rate of 55.76%. The return on capital employed (ROCE) reached a high of 26.94% and the dividend per share stood at Rs 0.25.

However, not all is well with DAT's promoter confidence. In the last quarter, they have cut their stake by 1.47%, thereby holding onto 68.73%. This recent change in promoter holdings has raised concerns that may impact investor sentiment.

Additionally, compared to its historical valuations, DAT's stock price is currently trading at a discount. The PEG ratio stands at 0.3, highlighting the underperformance of the company with respect to expected growth rates.

While DAT is technically still in a mildly bullish range, considering these concerns, investors should exercise caution while making any investment decisions.