Shivam Autotech Receives 'Hold' Rating After Strong Quarter, Technical Indicators Point to Bullish Trend

Shivam Autotech, a microcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive results in the quarter ending March 2024. The company's operating profit to interest ratio was at its highest at 0.99 times, with net sales also reaching a record high of Rs 123.74 crore. PBDIT also saw a significant increase at Rs 14.94 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 20th June 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV are also indicating a bullish trend for the stock.

With a ROCE of 1.2, the stock is fairly valued and has an enterprise value to capital employed ratio of 2.8. It is currently trading at a discount compared to its average historical valuations. However, despite generating a return of 63.33% in the past year, the company's profits have fallen by -44.5%.

In the long term, Shivam Autotech has outperformed the BSE 500 index and has shown market-beating performance. However, the company's long term fundamental strength is weak, with poor growth in net sales and operating profit over the last 5 years. It also has a high debt to equity ratio of 2.68 times and has reported losses, resulting in a negative ROE.

Interestingly, despite being a microcap company, domestic mutual funds hold only 0.06% of the company. This could 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, while Shivam Autotech has shown positive results in the recent quarter and has a bullish technical trend, its long term fundamental strength and high debt are areas of concern. Investors may want to hold onto the stock for now and keep an eye on its performance in the future.