Century Enka downgraded to 'Hold' by MarketsMOJO, shows positive short-term results

Century Enka, a smallcap textile company, has recently been downgraded to a 'Hold' by MarketsMOJO on November 13, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
Despite this, Century Enka has shown positive results in the last three consecutive quarters, with a growth in Net Sales of 1.56% in September 2024. The company's PBT LESS OI(Q) has also seen a significant growth of 112.0%, with the highest NET SALES(Q) at Rs 536.27 cr and PAT(Q) at Rs 21.40 cr, which has grown by 59.9%.

Technically, the stock is in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, KST, and OBV indicating a bullish trend. The majority shareholders of the company are Non-Institutional investors.

Century Enka has also outperformed the market (BSE 500) with a return of 47.96% in the last year, compared to the market's return of 26.05%. However, the company has shown poor long-term growth, with Net Sales growing at an annual rate of 4.18% and Operating profit at 7.70% over the last 5 years.

The stock currently has an expensive valuation with a Price to Book Value of 1, but it is trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 47.96%, its profits have risen by 72.2%, resulting in a PEG ratio of 0.3.

Overall, while Century Enka has shown positive results in the short term, its long-term growth and valuation may be a cause for concern. Investors are advised to hold onto their stocks for now and monitor the company's performance closely.