Current Rating and Its Significance
MarketsMOJO currently assigns a 'Hold' rating to Manaksia Aluminium Company Ltd, indicating a neutral stance on the stock. This suggests that investors should maintain their existing positions rather than aggressively buying or selling at this juncture. The 'Hold' rating reflects a balance of strengths and weaknesses across key evaluation parameters, signalling that while the stock shows promise, certain risks and challenges remain.
Rating Update Context
The rating was revised from 'Sell' to 'Hold' on 06 January 2026, accompanied by a 10-point increase in the Mojo Score from 40 to 50. This change reflects an improvement in the company’s outlook based on recent developments. Nevertheless, all fundamentals, returns, and financial metrics presented below are as of 03 February 2026, ensuring investors have the most up-to-date information to assess the stock’s current standing.
Quality Assessment
As of 03 February 2026, Manaksia Aluminium’s quality grade is considered average. The company demonstrates moderate operational efficiency and profitability, with a Return on Equity (ROE) averaging 4.15%. This level of ROE indicates relatively low profitability per unit of shareholders’ funds, which may concern investors seeking higher returns on equity capital. Additionally, the company’s ability to service its debt is limited, with a high Debt to EBITDA ratio of 5.25 times, signalling elevated financial leverage and potential vulnerability to interest rate fluctuations or economic downturns.
Valuation Perspective
The valuation grade for Manaksia Aluminium is attractive as of today. The stock trades at a discount relative to its peers’ historical valuations, supported by a Return on Capital Employed (ROCE) of 9.8% and an Enterprise Value to Capital Employed ratio of 1.3. These metrics suggest that the company is reasonably priced, offering potential value for investors willing to look beyond short-term volatility. The PEG ratio stands at 1.9, reflecting a moderate premium relative to earnings growth, which is acceptable given the company’s growth prospects.
Financial Trend Analysis
Currently, the financial trend for Manaksia Aluminium is negative, despite some encouraging signs. Operating profit has grown at an impressive annual rate of 49.24%, indicating strong underlying business momentum. However, quarterly net sales have declined by 6.6% compared to the previous four-quarter average, and the latest PBDIT quarter is at a low of ₹10.81 crores. Operating cash flow for the year is also modest at ₹0.97 crore, highlighting some cash generation challenges. These mixed signals suggest that while the company is growing profitably in the long term, short-term financial pressures persist.
Technical Outlook
The technical grade is mildly bullish as of 03 February 2026. The stock has delivered robust returns recently, with a 1-year return of 32.95% and a year-to-date gain of 28.21%. Over the past three months, the stock has appreciated by 27.72%, outperforming the BSE500 index across multiple time frames including one year and three years. Despite a 4.98% decline on the latest trading day, the overall technical momentum remains positive, suggesting that investor sentiment is cautiously optimistic about the stock’s near-term prospects.
Market Capitalisation and Shareholding
Manaksia Aluminium Company Ltd is classified as a microcap stock within the Non-Ferrous Metals sector. The majority shareholding is held by promoters, which may provide stability in corporate governance and strategic direction. However, microcap status often entails higher volatility and liquidity risks, factors that investors should consider when evaluating the stock.
Summary for Investors
In summary, the 'Hold' rating for Manaksia Aluminium Company Ltd reflects a nuanced view of the company’s current position. Investors are advised to maintain their holdings while monitoring key financial indicators such as debt servicing capacity and sales trends. The attractive valuation and positive technical momentum offer some encouragement, but the average quality and negative financial trend warrant caution. This balanced outlook suggests that the stock may be suitable for investors with a moderate risk appetite who are seeking exposure to the non-ferrous metals sector without aggressive positioning.
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Long-Term Performance and Returns
The latest data shows that Manaksia Aluminium has delivered market-beating performance over the long term. The stock’s 1-year return of 32.95% significantly outpaces many peers in the non-ferrous metals sector and broader market indices. Additionally, the company has outperformed the BSE500 index over the last three years and three months, underscoring its resilience and growth potential. This strong price appreciation is supported by a 21.8% increase in profits over the past year, reflecting operational improvements despite some recent sales softness.
Debt and Profitability Considerations
While the company’s growth trajectory is encouraging, investors should be mindful of its high leverage. The Debt to EBITDA ratio of 5.25 times indicates a substantial debt burden relative to earnings, which could constrain financial flexibility. The modest ROE of 4.15% further highlights limited profitability on shareholders’ equity, suggesting that returns may not yet fully compensate for the risks associated with the company’s capital structure.
Valuation Relative to Peers
Manaksia Aluminium’s valuation metrics remain attractive compared to sector peers. The Enterprise Value to Capital Employed ratio of 1.3 suggests the stock is trading at a discount, potentially offering a margin of safety for investors. The ROCE of 9.8% is respectable, indicating efficient use of capital to generate returns. These factors contribute to the 'Hold' rating by signalling that the stock is fairly valued with upside potential if operational challenges are addressed.
Technical Momentum and Market Sentiment
Technically, the stock exhibits mildly bullish characteristics. Despite a recent single-day decline of 4.98%, the overall trend remains positive with strong gains over multiple time horizons. This technical strength may attract momentum investors and supports the view that the stock is consolidating before potential further appreciation.
Conclusion
Manaksia Aluminium Company Ltd’s current 'Hold' rating by MarketsMOJO reflects a balanced assessment of its quality, valuation, financial trend, and technical outlook. Investors should consider maintaining their positions while closely monitoring debt levels and sales performance. The stock’s attractive valuation and positive price momentum offer opportunities, but the company’s financial challenges warrant a cautious approach. This rating serves as a guide for investors seeking to navigate the complexities of the non-ferrous metals sector with a measured risk profile.
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