Consistent Outperformance Against Benchmarks
Bhagwati Auto’s recent price appreciation is underpinned by its impressive returns over multiple time horizons. Over the past week, the stock has gained 4.38%, significantly outpacing the Sensex’s modest 0.87% rise. This trend extends over longer periods, with the company delivering a 15.06% return in the last month compared to the Sensex’s 2.03%. Year-to-date, Bhagwati Auto has surged 27.47%, nearly triple the benchmark’s 9.60% gain. Even more striking is the stock’s five-year return of 388.42%, dwarfing the Sensex’s 91.78% increase. Such sustained outperformance signals strong investor confidence and highlights the company’s ability to generate value beyond broader market movements.
Strong Technical and Trading Indicators
On the day in question, Bhagwati Auto outperformed its sector by 3.75%, reinforcing its leadership within the automobile passenger segment. The stock has been on a two-day winning streak, accumulating a 6.19% gain during this period. Intraday volatility saw the share price touch a high of ₹597, a 6.65% increase, while the low was ₹545.15, down 2.61%. Despite more volume trading near the lower price range, the stock remains firmly above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day marks, indicating a strong upward trend and positive market sentiment.
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Robust Financial Performance Driving Investor Confidence
The company’s financial metrics provide a compelling rationale for the stock’s rise. Bhagwati Auto boasts a high Return on Capital Employed (ROCE) of 18.02%, reflecting efficient management and effective utilisation of capital. Its low Debt to EBITDA ratio of 0.91 times underscores a strong ability to service debt, reducing financial risk and enhancing stability.
Operating profit growth has been particularly impressive, expanding at an annual rate of 73.96%. The company’s recent quarterly results, declared in September 2025, were very positive, with operating profit increasing by 268.55%. Key quarterly figures include a highest-ever PBDIT of ₹5.85 crores and an operating profit to net sales ratio of 13.70%, signalling strong operational efficiency. Profit before tax excluding other income also reached a peak of ₹4.84 crores, further reinforcing the company’s profitability trajectory.
Attractive Valuation and Market Position
Bhagwati Auto’s valuation metrics add to its appeal. With a ROCE of 25.7 and an enterprise value to capital employed ratio of 2.9, the stock is trading at a discount relative to its peers’ historical valuations. This attractive valuation is complemented by a low PEG ratio of 0.2, indicating that the stock’s price growth is not outpacing its earnings growth, a positive sign for value-conscious investors.
Promoters hold the majority stake in the company, which often signals aligned interests with shareholders and long-term commitment. The stock’s market-beating performance is evident not only in the recent year’s 28.87% return but also in its outperformance of the BSE500 index over the last three years, one year, and three months, highlighting consistent investor trust and strong fundamentals.
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Investor Participation and Liquidity Considerations
While the stock has shown strong price gains, there has been a slight decline in investor participation, with delivery volume on 28 November falling by 3.17% compared to the five-day average. Nevertheless, liquidity remains sufficient for sizeable trades, ensuring that investors can enter or exit positions without significant price impact. This balance of liquidity and strong fundamentals supports the stock’s continued upward trajectory.
Conclusion
Bhagwati Autocast Ltd’s share price rise on 01-Dec is a reflection of its solid financial health, attractive valuation, and consistent outperformance against market benchmarks. The company’s strong operating profit growth, efficient capital utilisation, and prudent debt management have bolstered investor confidence. Coupled with positive technical indicators and sustained momentum, these factors have driven the stock’s recent gains, positioning Bhagwati Auto as a compelling investment within the automobile passenger sector.
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