Acknit Industries Receives 'Hold' Rating from MarketsMOJO, Shows Promising Growth in Recent Quarter

Acknit Industries, a microcap textile company, has recently received a 'Hold' rating from MarketsMOJO on May 23, 2024. This upgrade is based on the company's positive financial results in the quarter ending March 2024. With the highest net sales of Rs 68.45 crore, PBDIT of Rs 5.51 crore, and PBT less OI of Rs 4.11 crore, Acknit Industries has shown promising growth in its recent quarter.
Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. Additionally, with a ROCE of 13.2, the company has an attractive valuation with a 1.1 enterprise value to capital employed. The stock is currently trading at a discount compared to its average historical valuations, making it an attractive option for investors.

In the past year, Acknit Industries has generated a return of 92.56%, outperforming the BSE 500 index. However, its profits have fallen by -15.1%, which may be a cause for concern. The majority shareholders of the company are the promoters, indicating their confidence in the company's future prospects.

While Acknit Industries has shown market-beating performance in the long term as well as the near term, its long-term fundamental strength is weak. The company has an average ROCE of 9.09% and has shown poor growth with a 4.45% annual growth rate in net sales over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.33 times, indicating a low ability to service debt.

In conclusion, while Acknit Industries has shown promising growth in its recent quarter and has outperformed the market in the past year, its long-term fundamental strength and high debt levels may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.