Cantabil Retail India Upgraded to 'Hold' by MarketsMOJO, Promoters Show Confidence

Cantabil Retail India, a smallcap company in the textile industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This decision is based on various factors, including the company's healthy long-term growth, technical trend, and rising promoter confidence.
One of the main reasons for the 'Hold' rating is the company's consistent growth in operating profit, which has increased at an annual rate of 57.33%. Additionally, the stock is currently in a mildly bullish range, with the technical trend improving from sideways on October 14, 2024. This is supported by factors such as MACD, Bollinger Band, and KST.

Moreover, the promoters of Cantabil Retail India have shown high confidence in the company's future by increasing their stake by 0.81% in the previous quarter. Currently, they hold 74.09% of the company, which is a positive sign for investors.

However, the company's financial results for June 2024 were flat, with the lowest ROCE (return on capital employed) at 15.86% and debtors turnover ratio at 33.85 times. The profit after tax for the quarter also saw a decline of -7.0% at Rs 11.41 crore.

In terms of valuation, Cantabil Retail India may seem expensive with a 3.8 enterprise value to capital employed ratio. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 8.48%, while its profits have fallen by -8.1%.

It is also worth noting that the stock has underperformed the market in the last year, with a return of 8.48% compared to the BSE 500 index's return of 35.61%. This could be a cause for concern for investors.

In conclusion, while Cantabil Retail India shows potential for growth in the long term, its current financial performance and valuation may not be as attractive. Investors may want to hold off on investing in this smallcap company until there is more positive movement in its financials and market performance.