Gujarat Craft Industries Receives 'Hold' Rating from MarketsMOJO, Shows Positive Technical Trend and Market Outperformance

Gujarat Craft Industries, a microcap trading company, has recently received a 'Hold' rating from MarketsMOJO on February 19, 2024. This upgrade is due to the stock's recent technical trend, which has improved from Mildly Bullish to Bullish, resulting in a 8.28% return since February 15, 2024. The stock is currently trading in a Bullish range and has shown positive indicators such as MACD, Bollinger Band, and KST.
In terms of valuation, Gujarat Craft Industries has an attractive ROCE of 7.8 and a 1.2 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, despite generating a return of 83.22% in the past year, the company's profits have decreased by -6.8%.

The majority shareholders of Gujarat Craft Industries are the promoters, indicating their confidence in the company's performance. The stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months, showcasing its market-beating performance in the long term as well as the near term.

However, the company's long-term fundamental strength is weak, with an average ROCE of 9.51%. Its net sales and operating profit have only grown at a rate of 4.19% and 8.04%, respectively, over the last 5 years. Additionally, the company has a high Debt to EBITDA ratio of 3.45 times, indicating a low ability to service debt.

In the latest quarter, Dec 23, Gujarat Craft Industries reported flat results with a PBT LESS OI(Q) of Rs 0.59 crore and an EPS(Q) of Rs 1.02, the lowest in recent quarters. Overall, while the stock has shown positive technical indicators and market-beating performance, its long-term fundamental strength and recent financial results suggest a 'Hold' rating for now.