Nivaka Fashions Receives 'Hold' Rating from MarketsMOJO, Shows Positive Short-Term Performance

Nivaka Fashions, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on June 25, 2024. This upgrade comes after the company reported positive results in the quarter ending March 2024, with its PBDIT, PBT less OI, and PAT reaching their highest levels at Rs 0.85 crore and Rs 0.91 crore respectively.
The stock is currently in a bullish range, with its technical trend improving from mildly bullish to bullish on June 25, 2024. The Bollinger Band and KST technical factors also indicate a bullish trend for the stock.

Institutional investors have also shown an increasing interest in Nivaka Fashions, with their stake in the company increasing by 0.58% in the previous quarter. This is a positive sign as institutional investors have better resources and capabilities to analyze the fundamentals of companies compared to retail investors.

Nivaka Fashions has also outperformed the market (BSE 500) with a return of 79.32% in the last year, compared to the market's return of 39.00%.

However, the company's long-term fundamental strength is weak, with a -57.71% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.82. The company's return on equity (avg) of 7.37% also signifies low profitability per unit of shareholders' funds.

Moreover, with a ROE of 6.4, Nivaka Fashions is currently trading at a very expensive valuation with a price to book value of 4.2. This is a premium compared to its average historical valuations. Additionally, while the stock has generated a high return of 79.32% in the past year, its profits have only increased by 67%, resulting in a PEG ratio of 0.

In conclusion, while Nivaka Fashions has shown positive performance in the short term, its weak long-term fundamentals and expensive valuation make it a 'Hold' for now. Investors should carefully consider these factors before making any investment decisions.