Nivaka Fashions Downgraded to 'Sell' by MarketsMOJO

Nivaka Fashions, a microcap company in the trading industry, has recently been downgraded to a 'Sell' by MarketsMOJO on December 26, 2023. This decision was based on the company's weak long-term fundamental strength, with a -57.71% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.82.
Moreover, Nivaka Fashions has a low profitability per unit of shareholders' funds, with a Return on Equity (avg) of 7.37%. The stock is also considered to be very expensive, with a price to book value of 3.2 and a PEG ratio of 0.1. However, it is currently trading at a discount compared to its average historical valuations.

In terms of performance, Nivaka Fashions has consistently underperformed against the benchmark over the last 3 years. In the past year, the stock has generated a return of -12.53%, while its profits have risen by 30%. This underperformance is also reflected in the company's stock price, which has underperformed the BSE 500 index in each of the last 3 annual periods.

On a positive note, Nivaka Fashions has shown some promising results in September 2023, with its operating cash flow at its highest at Rs 1.21 crore and its profit after tax at Rs 0.06 crore. The company's PBDIT (profit before depreciation, interest, and taxes) for the quarter was also at its highest at Rs 0.28 crore.

From a technical standpoint, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. However, it is worth noting that the majority of the company's shareholders are non-institutional investors.

In conclusion, while Nivaka Fashions has shown some positive results in the recent quarter, its overall weak fundamental strength and underperformance against the benchmark make it a 'Sell' according to MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.