Lambodhara Textiles Receives 'Hold' Rating from MarketsMOJO, Indicating Neutral Outlook

Lambodhara Textiles, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on January 12, 2024. This upgrade is based on several factors that indicate a neutral outlook for the company.
One of the key reasons for the 'Hold' rating is the high management efficiency of Lambodhara Textiles, with a ROCE (Return on Capital Employed) of 16.08%. This indicates that the company is utilizing its capital effectively to generate profits. Additionally, the company has a low Debt to EBITDA ratio of 1.14 times, which shows its strong ability to service debt.

Technically, the stock is currently in a Mildly Bullish range and has shown improvement since January 11, 2024, with a return of -1.54%. This is supported by factors such as MACD, Bollinger Band, and OBV, which all point towards a bullish trend.

From a valuation perspective, Lambodhara Textiles is trading at a discount compared to its average historical valuations, with a ROCE of 11.5 and an Enterprise value to Capital Employed ratio of 1.5. However, the company has shown poor long-term growth, with Net Sales growing at an annual rate of 2.14% and Operating profit at 11.23% over the last 5 years.

In the last 3 consecutive quarters, the company has declared negative results, with a significant decline in profits. This is reflected in the PAT (Profit After Tax) of Rs 0.62 crore, which has fallen by -81.8%, and the ROCE (Return on Capital Employed) of 11.32%. The PBT (Profit Before Tax) LESS OI (Other Income) is also at its lowest at Rs 1.54 crore.

Another concerning factor for Lambodhara Textiles is that 39.28% of its promoter shares are pledged. In a falling market, this can put additional downward pressure on the stock prices.

In the last 1 year, the stock has underperformed the market, generating a return of only 7.00% compared to the market (BSE 500) returns of 28.29%. This further supports the 'Hold' rating for Lambodhara Textiles.

Overall, while the company has shown some positive indicators, such as high management efficiency and a technically bullish trend, it also has several concerning factors, such as poor long-term growth and negative results. Therefore, the 'Hold' rating by MarketsMOJO seems appropriate for Lambodhara Textiles at this time.