M K Exim (India) downgraded to 'Sell' by MarketsMOJO due to negative results

M K Exim (India) is a microcap company in the textile industry. Recently, MarketsMOJO has downgraded its stock to 'Sell' due to negative results in December 2023. The company's profits have decreased by 23.10% and its return on capital employed is at its lowest at 32.17%. Additionally, its net sales for the quarter are also at their lowest at Rs 19.23 crore.
One of the main reasons for the downgrade is the company's expensive valuation with a price to book value of 4.3 and a ROE of 21.2. This is significantly higher than its average historical valuations. Despite generating a return of 34.88% in the past year, the company's profits have only increased by 0.3%, resulting in a high PEG ratio of 17.

On a positive note, M K Exim (India) has a low debt to equity ratio of 0.06 times and has shown healthy long-term growth with an annual net sales growth rate of 35.19% and operating profit growth rate of 81.87%.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since February 13, 2024, when it was mildly bullish, resulting in a -3.67% return since then.

It is worth noting that the majority of the company's shareholders are non-institutional investors. Overall, while M K Exim (India) has shown promising growth in the past, its current financial performance and expensive valuation make it a risky investment option. Investors are advised to carefully consider all factors before making any decisions regarding this microcap company.