Wheels India Upgraded to 'Hold' Rating by MarketsMOJO After Positive Financial Results

Wheels India ., a smallcap auto ancillary company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This decision was based on the company's positive financial results for the last three consecutive quarters. In the half-year period, the company's profits have grown by an impressive 236.63%, with a highest ROCE of 15.23% and a low debt-to-equity ratio of 0.86 times.
Technically, the stock is in a mildly bullish range and has shown improvement from a sideways trend on November 4, 2024. The MACD and Bollinger Band technical factors also indicate a bullish trend. With an attractive valuation and a discount compared to its historical average, the stock has generated a return of 7.36% in the past year while its profits have risen by 98.6%. The PEG ratio of the company is also at a low 0.2.

However, the company has weak long-term fundamental strength with an average ROCE of 8.43% and poor growth in net sales and operating profit over the last 5 years. Additionally, the high debt-to-EBITDA ratio of 3.70 times indicates a low ability to service debt. Institutional investors have also decreased their stake in the company, holding only 12.41% collectively. This could be a cause for concern as these investors have better resources to analyze company fundamentals.

In the last year, the stock has underperformed the market with a return of 7.36%, much lower than the market's return of 31.79%. While the company's recent financial performance has been positive, its long-term fundamentals and institutional investor participation may be a cause for caution. Therefore, MarketsMOJO has upgraded the stock to a 'Hold' rating.