Nivaka Fashions Receives 'Hold' Rating Upgrade

Nivaka Fashions, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on December 18, 2023. This upgrade comes after the company reported positive results in September 2023, with its operating cash flow reaching a high of Rs 1.21 crore and its profit after tax increasing to Rs 0.06 crore. Additionally, its PBDIT (profit before depreciation, interest, and taxes) for the quarter was at its highest at Rs 0.28 crore.
Technically, the stock is currently in a bullish range and has shown improvement since December 12, 2023, with a return of 1.89%. This is supported by various factors such as MACD, Bollinger Band, and KST.

However, the company's long-term fundamental strength is weak, with a -57.71% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also poor, with a low EBIT to Interest ratio of 0.82. Furthermore, the company's return on equity is at a low of 7.37%, indicating low profitability per unit of shareholders' funds.

In terms of valuation, Nivaka Fashions has a high ROE of 3.5 and a price to book value of 3.2, making it a very expensive stock. However, it is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of -8.73%, while its profits have increased by 30%. This gives the company a PEG ratio of 0.1, indicating a potential undervaluation.

Despite its recent underperformance against the benchmark, Nivaka Fashions has shown promising results and has the potential for growth in the future. Investors should carefully consider the company's financials and valuation before making any investment decisions.