Nivaka Fashions Receives 'Hold' Rating Upgrade

Nivaka Fashions, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in September 2023, with its operating cash flow reaching a high of Rs 1.21 crore and its profit after tax increasing to Rs 0.06 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 1st January 2024. This can be attributed to multiple factors such as MACD, Bollinger Band, and KST.

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

Furthermore, Nivaka Fashions has a very expensive valuation with a price to book value of 3.3 and a ROE of 3.5. However, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of -4.93%, while its profits have increased by 30%, resulting in a PEG ratio of 0.1.

Moreover, the company has consistently underperformed against the benchmark over the last 3 years, with a -4.93% return in the last year and underperformance against BSE 500 in each of the last 3 annual periods.

Overall, while Nivaka Fashions has shown positive results in the recent past, its long-term fundamental strength and performance against the benchmark are concerning. Investors are advised to hold their positions and monitor the company's performance closely.