MarketsMOJO downgrades M K Exim (India) to 'Hold' despite strong long-term growth

M K Exim (India), a microcap company in the textile industry, has recently been downgraded to a 'Hold' by MarketsMOJO on November 18, 2024. This decision was based on the company's low Debt to Equity ratio, which is at an average of 0.06 times. Despite this, the company has shown healthy long-term growth with an annual increase of 27.16% in Net Sales and 81.87% in Operating profit. In addition, M K Exim (India) has declared positive results in September 2024 after three consecutive negative quarters. Its Operating Cash Flow (Y) is at its highest at Rs 18.78 crore and PBDIT (Q) at Rs 7.12 crore. The company's Operating Profit to Net Sales (Q) is also at its highest at 32.16%. Technically, the stock is in a Mildly Bullish range with multiple factors such as MACD, Bollinger Band, KST, and OBV being bullish. The majority of shareholders are non-institutional investors. M K Exim (India) has consistently generated returns over the last three years and has outperformed BSE 500 in each of the last three annual periods. However, with a ROE of 20.1, the stock has a very expensive valuation with a 4.5 Price to Book Value. It is currently trading at a premium compared to its average historical valuations. While the stock has generated a return of 32.54% in the past year, its profits have decreased by -10.1%. Overall, M K Exim (India) shows potential for long-term growth, but investors should carefully consider its current valuation before making any investment decisions.