Active Clothing Co Faces Technical Shift Amid Strong Financial Performance and Debt Concerns

Active Clothing Co, a microcap player in the textile industry, has recently undergone an adjustment in evaluation, reflecting shifts in its technical indicators. The company's technical trend has transitioned from a mildly bearish stance to a bearish outlook, influenced by various metrics such as MACD, Bollinger Bands, and KST, which all indicate bearish conditions.
Despite reporting very positive financial performance in the third quarter of FY24-25, including significant growth in net profit and operating profit, the company faces challenges in management efficiency, as evidenced by a low Return on Capital Employed (ROCE) of 7.96%. Additionally, the high Debt to EBITDA ratio of 4.65 times raises concerns about its ability to service debt effectively.

Over the past year, Active Clothing Co has underperformed the broader market, with a return of -16.56% compared to the BSE 500's positive performance. While the stock has shown healthy long-term growth in operating profit, the recent technical adjustments highlight the complexities of its current market position.

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