Kriti Nutrients Downgraded to 'Hold' by MarketsMOJO, Despite Positive Quarter Results

Kriti Nutrients, a microcap company in the refined oil and vanaspati industry, has recently been downgraded to a 'Hold' by MarketsMOJO on October 3, 2024. This decision was based on the company's low Debt to Equity ratio, which is at an average of 0.10 times.
However, the company has shown positive results in the June 2024 quarter, with its operating cash flow at its highest at Rs 49.81 crore and its profit before tax less other income growing at 22.0%. Its net profit after tax is also at its highest at Rs 14.27 crore.

Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. With a return on equity of 26.6%, the company has an attractive valuation with a price to book value of 3.9. It is also currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 80.39%, while its profits have risen by 50.1%. The PEG ratio of the company is at 0.3.

Kriti Nutrients has also shown consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. However, its long-term growth has been poor, with net sales growing at an annual rate of 6.20% and operating profit at 15.32% over the last 5 years.

One concerning factor is that despite its size, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the company's current price or its business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, while Kriti Nutrients has shown positive results in the recent quarter and has attractive valuations, its long-term growth and lack of interest from domestic mutual funds may be a cause for concern. Investors may want to hold off on buying or selling the stock until there is more clarity on its future prospects.