Lumax Industries Receives 'Hold' Rating Amid Bullish Trend and Attractive Valuation

Lumax Industries, a smallcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes as the stock has shown a bullish trend and has generated a return of 7.78% since May 10, 2024.
The technical indicators for Lumax Industries have improved, with factors like MACD, Bollinger Band, KST, DOW, and OBV all showing a bullish trend. Additionally, the company has an attractive valuation with a ROCE of 10.2 and a 2.4 Enterprise value to Capital Employed.

Despite the stock's recent return of 32.45%, its profits have only risen by 4.2% over the past year, resulting in a PEG ratio of 5.4. The majority shareholders of Lumax Industries are the promoters, indicating their confidence in the company's future.

However, there are some concerns about the company's long-term fundamental strength. With an average ROCE of 0%, poor growth in net sales and operating profit over the last 5 years, and a high Debt to EBITDA ratio, Lumax Industries may face challenges in servicing its debt.

The company's results for March 2024 were flat, with the lowest operating profit to interest ratio at 4.53 times and the highest interest at Rs 14.53 crore. While the stock may have a bullish trend currently, investors should carefully consider the company's long-term fundamentals before making any investment decisions.