Manomay Tex India Receives 'Hold' Rating from MarketsMOJO Based on Strong Financial Performance

Manomay Tex India, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on September 4, 2024. This upgrade is based on the company's strong financial performance in the last quarter.
One of the key reasons for the 'Hold' rating is the company's high operating profit to interest ratio, which is at 3.75 times. This indicates that the company is generating enough profits to cover its interest expenses. Additionally, Manomay Tex India's PBDIT (Profit Before Depreciation, Interest, and Taxes) and PAT (Profit After Taxes) have also shown significant improvement, with both being at their highest levels at Rs 19.62 crore and Rs 5.11 crore respectively.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on September 4, 2024. This is supported by various factors such as MACD, Bollinger Band, KST, and DOW.

The majority shareholders of Manomay Tex India are its promoters, which can be seen as a positive sign for the company's stability and growth potential. Moreover, the stock has consistently outperformed the BSE 500 index in the last three annual periods, along with generating a return of 87.04% in the last year.

However, the company does have some weaknesses, such as a high level of debt and weak long-term fundamental strength. Its net sales have only grown at an annual rate of 9.10% and operating profit at 16.51% over the last five years. Additionally, the debt to equity ratio is at 1.61 times, indicating a high level of debt for the company.

Furthermore, with a ROCE (Return on Capital Employed) of 8.3, Manomay Tex India is currently trading at an expensive valuation with an enterprise value to capital employed ratio of 1.8. This is higher than its average historical valuations, which could be a cause for concern.

In conclusion, while Manomay Tex India has shown strong financial performance in the last quarter and has a bullish technical trend, it also has some weaknesses that investors should consider. The 'Hold' rating from MarketsMOJO suggests a neutral stance on the stock, and investors should carefully evaluate all factors before making any investment decisions.