Cantabil Retail India Upgraded to 'Hold' by MarketsMOJO After Strong Long-Term Growth

Cantabil Retail India, a smallcap company in the textile industry, has recently been upgraded to a 'Hold' by MarketsMOJO on January 9, 2024. This upgrade comes after the company's healthy long-term growth, with an annual operating profit growth rate of 57.33%.
Technically, the stock is currently in a bullish range, but the trend has deteriorated from bullish on January 8, 2024. However, there are multiple bullish factors for the stock, including MACD, Bollinger Band, KST, and OBV.

In September 2023, the company declared negative results after 9 consecutive positive quarters. The operating profit to interest ratio was at its lowest at 4.08 times, and the PAT (profit after tax) fell by -19.2% to Rs 7.50 crore. Additionally, the debtors turnover ratio for the half-year was also at its lowest at 40.28 times.

With a ROCE (return on capital employed) of 19.1, the company has an expensive valuation with an enterprise value to capital employed ratio of 4.3. However, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 4.28%, while its profits have risen by 15.2%. This gives the company a PEG (price/earnings to growth) ratio of 2.2.

Despite being a smallcap company, domestic mutual funds hold only 0% of Cantabil Retail India. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, the stock has underperformed the market, with a return of 4.28% compared to the market's (BSE 500) return of 25.03%. Overall, while Cantabil Retail India has shown strong long-term growth, its recent negative results and expensive valuation may have led to its 'Hold' rating.