Federal-Mogul Goetze (India) Ltd is Rated Hold

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Federal-Mogul Goetze (India) Ltd indicates a neutral stance, suggesting that investors should maintain their existing positions rather than aggressively buying or selling the stock at this time. This rating reflects a balanced view of the company’s prospects, considering both its strengths and areas of caution. The rating was revised from 'Sell' to 'Hold' on 28 January 2026, with the Mojo Score improving from 46 to 51, signalling a modest enhancement in the company’s overall outlook.

Here’s How the Stock Looks Today

As of 09 February 2026, Federal-Mogul Goetze (India) Ltd is classified as a smallcap company operating within the Auto Components & Equipments sector. The stock has shown mixed returns over various time frames: a strong 3.82% gain in the last trading day and a 5.28% rise over the past week, contrasted by a 2.02% decline over the last month and a more pronounced 16.31% drop over six months. Year-to-date, the stock is down 4.92%, but it has delivered a positive 9.39% return over the past year, reflecting some resilience amid sectoral and market fluctuations.

Quality Assessment

The company’s quality grade is assessed as average. This evaluation considers factors such as operational efficiency, profitability, and balance sheet strength. Federal-Mogul Goetze maintains a low debt-to-equity ratio, effectively zero, which is a positive indicator of financial stability and prudent capital management. The company has demonstrated healthy long-term growth, with operating profit expanding at an annualised rate of 59.60%. Additionally, it has reported positive results for the last three consecutive quarters, underscoring consistent operational performance.

Valuation Perspective

Valuation is a key factor behind the 'Hold' rating, with the company receiving a 'very attractive' valuation grade. As of today, the stock trades at a price-to-book value of 1.8, which is considered fair relative to its peers and historical averages. The return on equity (ROE) stands at a robust 13.3%, supporting the view that the company is generating reasonable returns on shareholder capital. Furthermore, the price/earnings to growth (PEG) ratio is a low 0.4, indicating that the stock may be undervalued relative to its earnings growth potential. Despite these attractive valuation metrics, the stock’s moderate recent price performance suggests cautious investor sentiment.

Financial Trend Analysis

The financial grade for Federal-Mogul Goetze is positive, reflecting strong cash flow generation and profitability metrics. The company’s operating cash flow for the year is the highest recorded at ₹220.69 crores, while the half-year return on capital employed (ROCE) is an impressive 19.36%. Cash and cash equivalents have also reached a peak of ₹656.97 crores, providing ample liquidity to support ongoing operations and potential growth initiatives. Over the past year, profits have risen by 30.5%, a significant increase that highlights the company’s improving earnings trajectory.

Technical Outlook

From a technical standpoint, the stock is graded as mildly bearish. While short-term price movements have shown some volatility, the recent daily and weekly gains suggest potential for recovery. However, the three-month and six-month declines indicate that the stock has faced selling pressure, possibly due to broader sector challenges or market sentiment. Investors should monitor technical indicators closely to identify any sustained trend reversals or confirmation of support levels.

Investor Interest and Market Position

Despite the company’s solid fundamentals and attractive valuation, domestic mutual funds hold a very small stake of just 0.01%. Given that mutual funds typically conduct thorough research and favour companies with strong growth prospects, this limited exposure may reflect either a cautious stance on the stock’s price or concerns about the business environment. This factor adds a layer of complexity for investors considering the stock, as institutional backing often influences market confidence.

What the Hold Rating Means for Investors

For investors, the 'Hold' rating suggests a wait-and-watch approach. The company’s fundamentals are stable, with encouraging growth and valuation metrics, but the technical signals and limited institutional interest counsel caution. Investors currently holding the stock may consider maintaining their positions to benefit from potential upside as the company continues to deliver positive financial results. Prospective buyers might prefer to observe further developments in price trends and market sentiment before initiating new positions.

Sector and Market Context

Operating in the Auto Components & Equipments sector, Federal-Mogul Goetze faces both opportunities and challenges. The sector is sensitive to economic cycles and automotive demand fluctuations. The company’s ability to sustain operating profit growth and maintain strong cash flows is a positive sign amid these dynamics. However, investors should remain mindful of sector headwinds and broader market volatility that could impact near-term performance.

Summary of Key Metrics as of 09 February 2026

To summarise, the stock’s key metrics today include a Mojo Score of 51.0, reflecting a moderate improvement from previous levels. The company’s operating cash flow and cash reserves are at record highs, supporting financial flexibility. Profit growth of 30.5% over the past year and a PEG ratio of 0.4 highlight strong earnings momentum relative to valuation. The technical grade remains mildly bearish, indicating some caution in price action. Overall, these factors combine to justify the current 'Hold' rating.

Conclusion

Federal-Mogul Goetze (India) Ltd’s 'Hold' rating by MarketsMOJO, last updated on 28 January 2026, reflects a balanced assessment of the company’s quality, valuation, financial trend, and technical outlook as of 09 February 2026. Investors should consider the company’s solid fundamentals and attractive valuation alongside the cautious technical signals and limited institutional interest. Maintaining existing holdings while monitoring market developments appears prudent at this juncture.

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