Arvind receives 'Buy' rating from MarketsMOJO after strong financial results.

Arvind, a leading textile company in the midcap industry, has recently received a 'Buy' rating from MarketsMOJO on February 12, 2024. This upgrade comes after the company's positive results in December 2023, with its operating profit to interest ratio reaching a high of 5.57 times and PBDIT at Rs 216.13 crore. Additionally, its operating profit to net sales ratio also reached a high of 11.45%.
The stock is currently in a bullish range and has shown a significant improvement in its technical trend since February 8, 2024, generating a return of -10.48% since then. The MACD and KST technical factors also indicate a bullish trend for the stock.

With a ROCE of 10.4, Arvind has a very attractive valuation with a 1.8 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. Despite a 222.12% return in the past year, the company's profits have fallen by -11.6%.

One of the key strengths of Arvind is its high institutional holdings at 26.88%. These investors have better capability and resources to analyze the company's fundamentals compared to retail investors. In fact, their stake has increased by 3.21% over the previous quarter.

Arvind has also shown market-beating performance in the long term as well as the near term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, there are some risks associated with investing in Arvind. The company has a high debt to EBITDA ratio of 3.12 times, which may affect its ability to service debt. Additionally, its net sales and operating profit have only grown at an annual rate of 1.15% and 2.14%, respectively, over the last 5 years. This may indicate poor long-term growth potential. Furthermore, the company's return on equity (average) is at a low of 6.85%, indicating low profitability per unit of shareholders' funds.

In conclusion, while Arvind has shown positive results and market-beating performance, investors should also consider the risks associated with the company before making any investment decisions.