Tuni Textile Mills Receives 'Hold' Rating After Strong Quarter, Attractive Valuation

Tuni Textile Mills, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO on September 19, 2024. This upgrade comes after the company reported positive results in the quarter ending June 2024. The company's net sales have grown by an impressive 62.6%, with the highest PBT and PAT in the quarter.
Technically, the stock is in a mildly bullish range and both the MACD and KST technical factors are also bullish. With a ROCE of 2.9, the stock is attractively valued with a 1.4 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 11.45%, while its profits have risen by 13%. The PEG ratio of the company is 0.5, indicating a potential for future growth.

However, Tuni Textile Mills has weak long-term fundamental strength with an average ROCE of 3.36%. Its net sales and operating profit have only grown at an annual rate of 18.05% and 13.09% respectively over the last 5 years. The company also has a high debt to EBITDA ratio of 7.44 times, indicating a low ability to service debt.

In the last year, the stock has underperformed the market, generating a return of 11.45% compared to the market's (BSE 500) return of 34.74%. The majority shareholders of the company are non-institutional investors.

Overall, while Tuni Textile Mills has shown positive results in the recent quarter and has potential for future growth, its weak long-term fundamentals and underperformance in the market may make it a risky investment. Investors are advised to hold the stock for now and monitor its performance closely.