Sharda Motor Industries: A Promising Investment with Strong Financials and Positive Performance

Sharda Motor Industries, a smallcap company in the auto ancillary industry, has recently caught the attention of investors with its positive performance in the market. On April 22, 2024, MarketsMOJO upgraded its stock call on Sharda Motor Industries to 'Buy', citing multiple factors that make it a promising investment.
One of the key reasons for the 'Buy' recommendation is the company's low Debt to Equity ratio, which is currently at 0 times. This indicates a strong financial position and stability for the company. In addition, the company has shown positive results in December 2023, with its ROCE (HY) reaching a high of 37.68%, CASH AND CASH EQUIVALENTS (HY) at Rs 658.24 crore, and DEBTORS TURNOVER RATIO (HY) at 9.52 times.

From a technical standpoint, the stock is currently in a Bullish range and has shown improvement since April 9, 2024, generating a return of -2.01%. Multiple technical indicators such as MACD, Bollinger Band, KST, DOW, and OBV also suggest a Bullish trend for the stock.

With a ROE of 28.9, the stock is also attractively valued with a Price to Book Value of 5.3. However, it is trading at a premium compared to its historical valuations. Despite this, the company has shown strong growth in profits, with a 43.7% increase in the past year and a PEG ratio of 0.4.

Sharda Motor Industries has also outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months, generating a return of 140.13%. However, there are some risks to consider, such as the fact that domestic mutual funds hold only 0% of the company. This may indicate that they are not comfortable with the current price or the business, as they have the capability to conduct in-depth research on companies.

Overall, Sharda Motor Industries is a promising smallcap company in the auto ancillary industry, with strong financials, positive technical indicators, and market-beating performance. However, investors should also consider the potential risks before making any investment decisions.