Kings Infra Ventures: 'Hold' Rating Based on Strong Growth

Kings Infra Ventures, a microcap company in the aquaculture industry, has recently been downgraded to a 'Hold' by MarketsMOJO on December 12, 2023. This decision was based on the company's healthy long-term growth, with a net sales growth rate of 22.73% and operating profit growth rate of 55.34%. The company has also declared positive results for the last 8 consecutive quarters, with its highest net sales and operating profit to net sales in the last quarter.
Despite its positive performance, the stock is currently in a mildly bullish range, with multiple factors such as MACD, DOW, and OBV indicating a bullish trend. The majority shareholders of the company are the promoters, and it has shown market-beating performance in both the long-term and near-term, outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, there are some concerns regarding the company's management efficiency, with a low return on capital employed (ROCE) of 9.66%. This signifies a low profitability per unit of total capital, including equity and debt. The company also has a high debt to EBITDA ratio of 4.38 times, indicating a low ability to service debt. In terms of return on equity (ROE), the company has a low profitability per unit of shareholders' funds at 7.32%.

The stock is currently trading at a discount compared to its average historical valuations, with a very expensive valuation of 22.6 ROCE and an enterprise value to capital employed ratio of 6.9. However, in the past year, the stock has generated a return of 69.79%, while its profits have risen by 99.5%, resulting in a PEG ratio of 0.5. Overall, while the company has shown positive growth and performance, there are some concerns regarding its management efficiency and ability to service debt. Investors are advised to hold their positions and monitor the company's performance closely.