Zylog Systems - Advice to remain cautious

Zylog systems share price has seen a  sharp decline recently on account of speculation that the company's financiers sold pledged shares after the promoters failed to provide margin money. The recent share price drop has eroded much of the Company's market capitalization.

Zylog systems' management has clarified that there has nopt been any material change in the business and there are no reportable significant developments in its day to day operations. Crisil and Icra had also rated the fundamentals of Zylog Systems at 3 out of 5, indicating "good fundamentals".

The recent price movement in Zylog systems shares could be said due to high promoter's pledging of shares and negative market sentiments, due to rumors that promoters have been unable to meet margin calls on pledged shares.

We advise you to remain cautious about the stock and not make any fresh investments in the stock for the time being. We will valuate the stock after Sep 2012 results are released and will keep you updated about any changes in the valuation guidance.