Nahar Spinning Mills a mixed bag after recent positive results

Nahar Spinning Mills, a microcap textile company, has received a 'Hold' rating from MarketsMojo. This follows a positive June 2024 quarter, breaking a seven-quarter negative streak. The company's operating profit to interest ratio is strong at 2.47 times, and PAT has surged 137.9 per cent to Rs 6.64 crore.

Technically, the stock shows a mildly bullish trend, with improving MACD and OBV indicators. Valuations appear attractive with a low enterprise value to capital employed ratio of 0.8.

However, the company's long-term performance is weak, with a 5-year operating profit CAGR of -24.92 per cent. The high debt-to-EBITDA ratio of 7.51 times raises concerns about debt servicing ability. The return on equity (average) of 8.66 per cent indicates low profitability.

Over the past year, the stock has underperformed the benchmark, generating -3.89 per cent returns. While the recent positive quarter is encouraging, investors should exercise caution due to the company's historical performance and financial health.