Federal-Mogul Goetze (India) downgraded to 'Hold' by MarketsMOJO due to low Debt to Equity ratio

Federal-Mogul Goetze (India) is a smallcap company in the auto ancillary industry. Recently, MarketsMOJO downgraded its stock call to 'Hold' on August 5, 2024. This decision was based on the company's low Debt to Equity ratio, which is currently at 0 times.
However, the company has shown positive results in the March 2024 quarter, with its ROCE (HY) reaching a high of 16.60% and its cash and cash equivalents (HY) at Rs 418.17 crore. Additionally, its PBDIT (Q) also reached a high of Rs 72.38 crore.

Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROE of 11.4, the company has a very attractive valuation with a price to book value of 2.1. It is also currently trading at a discount compared to its average historical valuations.

However, the company has shown poor long-term growth, with its operating profit growing at an annual rate of -2.01% over the last 5 years. Furthermore, there has been a decrease in participation by institutional investors, with their stake decreasing by -0.53% over the previous quarter. Currently, institutional investors hold only 0.54% of the company, despite having better resources and capabilities to analyze company fundamentals.

In the last 1 year, the stock has underperformed the market, generating a return of only 11.45% compared to the market's (BSE 500) return of 32.89%. Overall, while Federal-Mogul Goetze (India) may have some positive aspects, it is important for investors to carefully consider all factors before making any investment decisions.