MarketsMOJO Downgrades Acknit Industries to 'Sell' Due to Weak Fundamentals and Underperformance

Acknit Industries, a microcap textile company, has recently been downgraded to a 'Sell' by MarketsMOJO on August 12, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Capital Employed (ROCE) of 9.09%, poor long-term growth with only a 5.11% annual increase in net sales over the last 5 years, and a high Debt to EBITDA ratio of 4.33 times, indicating a low ability to service debt.
In addition, the company's results for the quarter ending in June 2024 were flat, and the stock has underperformed the market in the last year with a return of only 16.75%, compared to the market's return of 35.35% (BSE 500). However, there are some positive technical factors to note, as the stock is currently in a Mildly Bullish range and both the MACD and KST technical factors are Bullish.

Furthermore, Acknit Industries has an attractive valuation with an ROCE of 13.2 and a 1.2 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations. However, it is important to note that while the stock has generated a return of 16.75% in the last year, its profits have actually fallen by -5.2%.

It is worth mentioning that the majority shareholders of Acknit Industries are the promoters of the company. Overall, based on the current information and analysis, MarketsMOJO has downgraded the stock to 'Sell'. Investors should carefully consider these factors before making any decisions regarding Acknit Industries.