Goodyear India Downgraded to 'Hold' Rating

Goodyear India, a leading tyre manufacturer in the smallcap industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 7, 2023. This decision was based on various factors, including the company's high management efficiency with a ROE of 16.71% and low Debt to Equity ratio of 0 times.
In addition, the company has shown positive results in September 2023, with PBT LESS OI(Q) at Rs 46.30 crore growing at 22.1% and PAT(Q) at Rs 37.94 crore growing at 22.0%. The stock is also technically in a Mildly Bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend.

However, with a ROE of 21.7, the stock is currently trading at a premium compared to its average historical valuations. While the stock has generated a return of 17.37% in the past year, its profits have only risen by 33%, resulting in a PEG ratio of 0.7.

It is worth noting that the majority shareholders of Goodyear India are the promoters, which may indicate a strong belief in the company's potential. However, the company has shown poor long-term growth, with net sales growing at an annual rate of 8.81% and operating profit at 4.71% over the last 5 years.

Overall, while Goodyear India may have some positive aspects, the recent downgrade to 'Hold' suggests caution for investors. It is important to carefully consider all factors before making any investment decisions.