MarketsMOJO upgrades Ambika Cotton Mills to 'Hold' rating, despite concerns over long-term growth and valuation

Ambika Cotton Mills, a smallcap textile company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes as the company has a low Debt to Equity ratio, indicating a stable financial position. Additionally, the stock is currently in a bullish trend, with technical indicators such as MACD, Bollinger Band, KST, and OBV all pointing towards a positive outlook.
However, the company has shown poor long-term growth, with only a 4.65% increase in Net Sales and 11.72% in Operating profit over the last 5 years. This has resulted in negative results for the past 7 consecutive quarters. Furthermore, the company's Interest and PAT have grown at a high rate of 120.21% and -42.17% respectively, while its ROCE (HY) is at a low of 11.09%.

With a ROE of 7.3, the company's valuation is considered to be very expensive, with a price to book value of 1.4. The stock is currently trading at a premium compared to its historical valuations. Despite generating a return of 37.13% in the past year, the company's profits have declined by -43.7%.

It is also worth noting that despite being a smallcap company, domestic mutual funds hold only 0% of the company's shares. This could indicate that they are either not comfortable with the current price or have concerns about the company's business.

In conclusion, while Ambika Cotton Mills has shown some positive indicators, it is important to consider the company's poor long-term growth and negative results before making any investment decisions. Investors should also keep an eye on the company's valuation and the lack of interest from domestic mutual funds.