Enkei Wheels India Downgraded to 'Sell' by MarketsMOJO

Enkei Wheels India, a smallcap company in the auto ancillary industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 6, 2023. This decision was based on the company's weak long-term fundamental strength, with a -180.14% CAGR growth in operating profits over the last 5 years. Additionally, Enkei Wheels India has a high debt to EBITDA ratio of 28.00 times, indicating a low ability to service debt.
The company's profitability per unit of shareholders' funds is also low, with a return on equity (avg) of 2.18%. This is further supported by its expensive valuation, with a ROCE of 2.5 and a 3 enterprise value to capital employed. Despite trading at a discount compared to its historical valuations, the stock has generated negative returns of -8.07% in the past year, while the market (BSE 500) has generated returns of 16.72%.

One factor that may have contributed to the downgrade is the low stake held by domestic mutual funds in the company, which could indicate a lack of confidence in either the stock's price or the business itself. Enkei Wheels India has also underperformed the market in the last year, despite positive results in September 2023. The company's PBT LESS OI(Q) has grown at 463.5%, PAT(Q) at 701.3%, and NET SALES(Q) at its highest at Rs 206.76 crore.

Technically, the stock is currently in a mildly bullish range, with its MACD and Bollinger Band technical factors also showing a bullish trend. However, it is important to note that this article is not a recommendation to buy or sell the stock, but rather a factual analysis of Enkei Wheels India's current situation. Investors should conduct their own research and make informed decisions based on their own risk tolerance and investment goals.