Shalimar Wires Industries Receives 'Hold' Rating Upgrade

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 operating profit to interest (Q) at 2.15 times, the highest in its industry. Additionally, the company's debt-equity ratio (HY) is at a low of 2.61 times.
Technically, the stock is currently in a bullish range and has shown improvement since November 15, 2023, generating a return of 17.71%. Multiple factors, such as MACD, Bollinger Band, KST, and OBV, indicate a bullish trend for the stock.

Over the last three years, Shalimar Wires Industries has consistently outperformed the BSE 500, with a return of 112.56% in the last year alone. However, the company's long-term fundamental strength is weak, with a high debt-to-equity ratio (avg) of 2.40 times and a poor growth rate of 2.83% in net sales over the last five years. The return on equity (avg) is also low at 0.32%, indicating low profitability per unit of shareholders' funds.

The stock is currently trading at an expensive valuation, with an enterprise value to capital employed ratio of 1.6. However, it is still at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 112.56%, its profits have risen by 284.6%, resulting in a low PEG ratio of 0.2.

It is worth noting that 54.24% of the promoter shares are pledged, which could put additional downward pressure on the stock prices in falling markets. Overall, while Shalimar Wires Industries has shown strong performance in the past year, its long-term fundamentals and high debt levels should be considered before making any investment decisions.