MarketsMOJO upgrades Mohite Industries to 'Hold' rating amid bullish trend

Mohite Industries, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on June 6, 2024. This upgrade comes as the stock has shown a bullish trend and has generated a return of 7.43% since June 5. The technical indicators such as MACD, Bollinger Band, and KST are all pointing towards a positive outlook for the stock.

One of the main reasons for the 'Hold' rating is the attractive valuation of the company with a ROCE of 4.9 and an enterprise value to capital employed ratio of 1. This indicates that the stock is currently trading at a discount compared to its historical valuations. However, it is important to note that while the stock has generated a return of 62.62% in the past year, its profits have fallen by -64.9%.

The majority shareholders of Mohite Industries are the promoters, which can be seen as a positive sign for investors. The company has also shown consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods.

On the other hand, the company's long-term fundamental strength is weak with a low CAGR growth of 1.06% in net sales over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 4.77 times, indicating a low ability to service debt. The return on equity (avg) of 5.44% also signifies low profitability per unit of shareholders' funds.

In the latest financial results for March 2024, the company has shown flat results with a decline in profits. The PAT (9M) has grown at -49.52%, while the PBT LESS OI (Q) has fallen at -136.6%. The ROCE (HY) is also at its lowest at 6.06%.

Overall, while Mohite Industries has shown a bullish trend in the short term, its long-term fundamentals and profitability remain a concern. Investors are advised to hold their positions and monitor the company's performance closely.