Shalimar Wires Industries Ltd: Valuation Shift Signals Renewed Price Attractiveness

Valuation Metrics Show Positive Recalibration

As of early February 2026, Shalimar Wires trades at a price of ₹19.85, up 2.43% from the previous close of ₹19.38. The stock’s 52-week range spans from ₹18.00 to ₹25.75, indicating a relatively tight trading band with some upside potential. The company’s price-to-earnings (P/E) ratio stands at 24.89, a figure that has contributed to the recent upgrade in its valuation grade from very attractive to attractive. This shift reflects a recalibration in market perception, suggesting that while the stock remains reasonably priced, it is now viewed as more favourably valued relative to its earnings potential.

Complementing the P/E ratio, the price-to-book value (P/BV) is at 2.14, which is moderate for the Garments & Apparels sector. The enterprise value to EBITDA (EV/EBITDA) ratio of 6.07 further supports the attractive valuation narrative, indicating that the company is trading at a reasonable multiple of its operating cash flow. Other valuation multiples such as EV to EBIT (11.35), EV to capital employed (1.38), and EV to sales (1.21) reinforce the view that Shalimar Wires is competitively priced within its industry context.

Peer Comparison Highlights Relative Strength

When benchmarked against peers in the Garments & Apparels sector, Shalimar Wires’ valuation metrics stand out positively. For instance, POCL Enterprises, a peer with a fair valuation grade, trades at a P/E of 13.87 but commands a higher EV/EBITDA multiple of 9.76. Similarly, Euro Panel, classified as expensive, has a P/E of 23.94 but a significantly higher EV/EBITDA of 13.49. Sizemasters Tech, deemed very expensive, trades at a P/E of 75.31 and an EV/EBITDA of 55.12, underscoring Shalimar Wires’ relative affordability.

Other attractive peers include NILE with a P/E of 9.89 and EV/EBITDA of 6.55, and Manaksia Aluminium at a P/E of 34.68 and EV/EBITDA of 9.71. Shalimar Wires’ PEG ratio of 0.10 is particularly noteworthy, signalling that the stock’s price growth is low relative to its earnings growth, which is a positive indicator for value-conscious investors. This PEG ratio is considerably lower than many peers, such as Manaksia Aluminium (1.59) and Euro Panel (0.92), further enhancing its appeal.

Financial Performance and Returns Contextualised

Shalimar Wires’ latest return on capital employed (ROCE) is 12.14%, while return on equity (ROE) stands at 8.58%. These figures indicate moderate efficiency in generating returns from capital and equity, respectively, though they trail some of the more robust performers in the sector. The absence of a dividend yield suggests the company is reinvesting earnings to fuel growth rather than distributing cash to shareholders.

Examining stock returns relative to the Sensex reveals a mixed picture. Over the past week, Shalimar Wires outperformed the benchmark with a 3.93% gain versus Sensex’s 0.91%. However, over longer periods, the stock has underperformed. The one-month return is -11.82% compared to Sensex’s -2.49%, and year-to-date the stock is down 8.36% while the Sensex has declined 2.24%. Over one year, the stock’s return is -16.07%, contrasting with the Sensex’s positive 6.44%.

Despite recent underperformance, the company’s longer-term returns are impressive. Over three years, Shalimar Wires has delivered a 64.59% return, significantly outpacing the Sensex’s 36.94%. Over five and ten years, the stock has generated extraordinary returns of 272.42% and 278.10%, respectively, compared to the Sensex’s 64.22% and 238.44%. This long-term outperformance underscores the company’s potential for wealth creation despite short-term volatility.

Mojo Score and Rating Update

MarketsMOJO’s latest assessment assigns Shalimar Wires a Mojo Score of 40.0, reflecting a cautious stance. The Mojo Grade was downgraded from Hold to Sell on 27 January 2026, signalling increased risk or valuation concerns despite the improved attractiveness rating. The market capitalisation grade remains low at 4, indicating a smaller market cap relative to peers, which may contribute to liquidity and volatility considerations.

Investors should weigh the valuation improvements against the downgrade in Mojo Grade, recognising that while the stock is more attractively priced, underlying risks or fundamental challenges may persist. The sector’s cyclical nature and competitive pressures in Garments & Apparels warrant careful monitoring of operational performance and margin trends.

Investment Implications and Outlook

The recent upgrade in valuation grade to attractive suggests that Shalimar Wires Industries Ltd is becoming a more compelling investment proposition on a price basis. The company’s P/E and EV/EBITDA multiples are reasonable relative to peers, and the exceptionally low PEG ratio indicates undervaluation relative to earnings growth potential. However, the downgrade in Mojo Grade to Sell highlights caution, signalling that investors should remain vigilant about operational risks and market dynamics.

Long-term investors may find value in the stock’s historical outperformance and improving valuation metrics, but short-term traders should be mindful of recent underperformance against the Sensex and sector volatility. The absence of dividend yield and moderate returns on capital suggest that growth and profitability improvements will be key drivers for future price appreciation.

In summary, Shalimar Wires presents a nuanced investment case: valuation attractiveness has improved, but fundamental and market risks remain. A balanced approach, incorporating ongoing monitoring of financial performance and sector trends, is advisable for investors considering exposure to this Garments & Apparels player.

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