Enkei Wheels India Upgraded to 'Hold' by MarketsMOJO, Shows Positive Financial Results

Enkei Wheels India, a smallcap company in the auto ancillary industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This decision is based on the company's positive financial results for the last four consecutive quarters. In the half-yearly period, the company's PAT has grown by an impressive 179.67%, with the highest operating cash flow of Rs 58.51 crore and a 36.17% growth in net sales.
Technically, the stock is currently in a bullish range and has shown improvement from being mildly bullish on 16-Oct-24. Multiple factors such as MACD, Bollinger Band, KST, and DOW are also indicating a bullish trend for the stock.

However, Enkei Wheels India has weak long-term fundamental strength with an average ROCE of 2.49%. Its net sales have only grown at an annual rate of 12.10% over the last five years, indicating poor long-term growth. The company also has a high debt to EBITDA ratio of 4.05 times, which shows a low ability to service debt.

In terms of valuation, the stock is considered expensive with an ROCE of 4.8 and an enterprise value to capital employed ratio of 3.7. However, it is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 23.34%, while its profits have risen by 514.1%. This gives the company a PEG ratio of 0.1.

It is worth noting that despite its small size, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, Enkei Wheels India has underperformed the market, with a return of 23.34% compared to the market's (BSE 500) return of 35.33%. While the stock has shown positive growth, it is important to consider the company's weak long-term fundamentals and high debt before making any investment decisions.