MarketsMOJO Upgrades Ambika Cotton Mills to 'Hold' Rating Amid Stable Financial Position

Ambika Cotton Mills, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on October 28, 2024. This upgrade comes as the company has a low Debt to Equity ratio, indicating a stable financial position.

Technically, the stock is in a Mildly Bullish range and has shown improvement from a Sideways trend on October 28, 2024. The MACD and KST technical factors also suggest a Bullish trend for the stock.

However, the company has shown poor long-term growth with only a 4.70% annual growth in Net Sales and a -0.31% growth in Operating profit over the last 5 years. In the latest quarter, the results were flat with a 48.71% growth in Interest and a -22.92% growth in PAT. The ROCE (Return on Capital Employed) for the first half of the year was at its lowest at 11.09%.

With a ROE (Return on Equity) of 7.4, the stock is currently trading at a Very Expensive valuation with a Price to Book Value of 1. This is a premium compared to its average historical valuations. In the past year, while the stock has generated a return of 0.76%, its profits have fallen by -32%.

Interestingly, despite its size, domestic mutual funds hold only 0% of the company. This could be due to their capability to conduct in-depth research on companies and their small stake may signify their discomfort with the current price or the business.

In the last year, the stock has underperformed the market with a return of 0.76%, much lower than the market (BSE 500) returns of 34.46%. With these factors in mind, MarketsMOJO has upgraded the stock to a 'Hold' rating.