Garment Mantra Lifestyle Receives 'Hold' Rating from MarketsMOJO Based on Technical Trend and Attractive Valuation

Garment Mantra Lifestyle, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on August 20, 2024. This upgrade is based on the company's technical trend, which has improved from Mildly Bullish to Bullish. The stock's Bollinger Band and KST technical factors also indicate a positive trend.
One of the reasons for the 'Hold' rating is the company's attractive valuation with a ROCE of 9.3 and a 1.4 Enterprise value to Capital Employed. Additionally, 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 42.67%, while its profits have increased by 185%. The PEG ratio of the company is also at a low 0.1.

However, there are some concerns regarding the company's long-term fundamental strength. Over the last 5 years, the company has seen a -16.15% CAGR growth in Operating Profits, indicating weak performance. The company also has a high Debt to EBITDA ratio of 5.47 times, which may affect its ability to service debt. The Return on Equity (avg) of 9.13% also suggests low profitability per unit of shareholders' funds.

In the latest quarter, the company's results were flat, with a 38.25% growth in INTEREST(HY) at Rs 2.53 crore. The DEBT-EQUITY RATIO(HY) is also at its highest at 2.10 times. The majority shareholders of Garment Mantra Lifestyle are non-institutional investors.

Overall, while the technical trend and attractive valuation may make Garment Mantra Lifestyle a good investment option, the company's weak long-term fundamental strength and high debt levels should be considered before making any investment decisions.