Advik Capital Downgraded to 'Hold' Rating by MarketsMOJO on October 18, 2024

Advik Capital, a microcap company in the electric equipment industry, has recently been downgraded to a 'Hold' rating by MarketsMOJO on October 18, 2024. This decision was based on the company's current financial performance and market trends.
While Advik Capital has shown a healthy long-term growth with an annual increase of 181.44% in net sales and 61.07% in operating profit, its recent net profit growth of 235.71% in June 2024 has been deemed as very positive. However, the company's PBT LESS OI(Q) at Rs 2.85 crore has only grown at 235.29%, and its PAT(Q) at Rs 2.47 crore has grown at 285.9%, indicating a slower growth rate.

Moreover, with a ROCE of 4.2, Advik Capital is currently trading at a discount compared to its average historical valuations. This, along with the fact that the stock has generated a return of 7.79% in the past year while its profits have fallen by -8.9%, suggests that the stock may not be performing as well as expected.

One of the major concerns for Advik Capital is its poor management efficiency, with a low ROCE of 5.15%. This indicates that the company is not generating enough profitability per unit of total capital (equity and debt).

Technically, the stock is currently in a mildly bearish range, with its technical trend deteriorating from mildly bullish on October 18, 2024. The stock has also underperformed the market in the last year, generating a return of only 7.79% compared to the market's return of 34.39%.

It is important for investors to carefully consider these factors before making any investment decisions regarding Advik Capital. While the company has shown potential for long-term growth, its current financial performance and market trends suggest a 'Hold' rating for now.