Bhilwara Spinners Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results in First Half of 2024

Bhilwara Spinners, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on September 9, 2024. This upgrade is based on the company's positive results in the first half of 2024, with higher net sales of Rs 13.57 crore and a debtors turnover ratio of 18.08 times. Additionally, the company's PBDIT (profit before depreciation, interest, and taxes) for the quarter was at its highest at Rs 1.42 crore.
Technically, the stock is currently in a bullish range and has shown improvement since September 5, 2024, generating a return of -4.1%. This is supported by factors such as MACD, KST, and DOW. The majority shareholders of Bhilwara Spinners are its promoters.

The company has consistently delivered strong returns over the last three years, outperforming the BSE 500 index. In the last year alone, the stock has generated a return of 111.64%. However, its long-term fundamental strength is weak with an average return on capital employed (ROCE) of 0.01%. The company's growth has also been poor, with net sales growing at an annual rate of 40.54% and operating profit at 14.64% over the last five years. Additionally, its ability to service its debt is weak with a poor EBIT to interest ratio of -0.38.

The stock is currently trading at a very expensive valuation with a 2 enterprise value to capital employed. However, it is currently at a discount compared to its average historical valuations. Despite generating strong returns in the past year, the company's profits have only risen by 37.1%. Overall, while Bhilwara Spinners has shown positive results in the first half of 2024, its long-term growth and fundamental strength may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.