Wheels India . Upgraded to 'Hold' Rating by MarketsMOJO After Positive Results and Technical Indicators

Wheels India ., a smallcap company in the auto ancillary industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This upgrade comes after the company declared very positive results in March 2024, with a growth in net profit of 397.64%. The company's PAT (HY) was also higher at Rs 48.63 crore, while its ROCE (HY) reached a record high of 12.20%. Additionally, the company's debt-equity ratio (HY) was at its lowest at 0.93 times.
Technically, the stock is currently in a mildly bullish range and has shown improvement from a mildly bearish trend on June 11, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock.

Attractive valuation is another positive aspect of Wheels India ., with a ROCE of 11.1 and an enterprise value to capital employed ratio of 1.6. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 21.38%, while its profits have risen by 12.4%. However, the PEG ratio of the company is 2.8, indicating a weak long-term fundamental strength.

The company has a poor long-term growth rate, with net sales growing at an annual rate of 7.55% and operating profit at 0.92% over the last 5 years. Additionally, its ability to service debt is low, with a high debt to EBITDA ratio of 3.70 times.

In the last year, Wheels India . has underperformed the market, generating a return of 21.38% compared to the market's (BSE 500) return of 36.93%. While the company's recent results and technical indicators show a positive outlook, its weak long-term fundamental strength and underperformance in the market may be a cause for concern for investors. Therefore, MarketsMOJO has upgraded the stock to a 'Hold' rating, suggesting a cautious approach for investors.