Steel Strips Wheels Receives 'Hold' Rating, Mixed Financials

Steel Strips Wheels, a smallcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO on June 15, 2023. This upgrade is based on technical factors such as the stock being in a Mildly Bullish range and its MACD and KST indicators showing a Bullish trend.
In terms of valuation, the company has an attractive ROCE of 18.2 and a low Enterprise value to Capital Employed ratio of 2.5. Additionally, the stock is currently trading at a discount compared to its historical valuations. However, despite generating a return of 61.97% in the past year, the company's profits have fallen by -1.7%.

One positive aspect for Steel Strips Wheels is the increasing participation of institutional investors, who have collectively increased their stake by 1.43% in the previous quarter. This indicates their confidence in the company's fundamentals and their ability to analyze them better than retail investors.

On the other hand, the company has a high Debt to EBITDA ratio of 2.82 times, which may affect its ability to service debt. Additionally, its long-term growth has been poor with operating profit growing at an annual rate of only 19.67% over the last 5 years.

In the latest quarter, the company's results have been flat with the highest interest expense of Rs 26.01 crore. Overall, while Steel Strips Wheels has shown market-beating performance in the past year, its financials and long-term growth potential may be a cause for concern. Investors are advised to hold their positions and monitor the company's performance closely.