Shalimar Wires Industries Receives 'Hold' Rating and Shows Bullish Trend in Non-Ferrous Metal Industry

Shalimar Wires Industries, a microcap company in the non-ferrous metal industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive results in September 2023, with its ROCE (HY) reaching a high of 13.98% and its operating profit to interest (Q) at 2.15 times, the highest in its industry. Additionally, the company has a low debt-to-equity ratio (HY) of 2.61 times.
Technically, the stock is in a bullish range and has shown improvement since February 5, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish trend for the stock.

Shalimar Wires Industries has also outperformed the BSE 500 in the long term, generating a return of 122.31% in the last year. However, the company's long-term fundamental strength is weak, with a poor growth rate of 2.83% in net sales over the last 5 years. The company also has a high debt-to-equity ratio (avg) of 2.40 times and a low return on equity (avg) of 0.32%, indicating low profitability per unit of shareholders' funds.

The stock is currently trading at a discount compared to its historical valuations, making it an attractive option for investors. However, with an ROCE of 11.6, the stock is considered to be expensive with a 1.6 enterprise value to capital employed. The PEG ratio of the company is 0.2, indicating that its profits have risen by 284.6% in the past year, while the stock has generated a return of 122.31%.

It is worth noting that 54.24% of the promoter shares of Shalimar Wires Industries are pledged, which could put additional downward pressure on the stock prices in falling markets. Overall, while the stock has shown strong performance in the near term, its high debt and weak long-term fundamentals may make it a risky investment. Investors are advised to carefully consider all factors before making any investment decisions.