Talbros Automotive Components receives 'Hold' rating from MarketsMOJO, shows positive trends and attractive valuations

Talbros Automotive Components, 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 mildly bullish trend and has improved from a sideways trend on 12th November 2024. Additionally, the On-Balance Volume (OBV) has been bullish since the same date.
One of the key factors contributing to this upgrade is the company's attractive valuation with a ROCE of 14.1 and a 3 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. Despite generating a return of 22.14% in the past year, the company's profits have risen by 36.6%, resulting in a PEG ratio of 0.6.

However, the company has shown poor long-term growth with a net sales growth rate of 11.35% and operating profit growth rate of 25.21% over the last 5 years. In the latest quarter, the company's results were flat with a low Debtors Turnover Ratio of 3.70 times and a decrease in PBT LESS OI(Q) at Rs 21.53 crore, falling by -6.0%.

It is worth noting that despite its smallcap size, domestic mutual funds hold only 0% of the company. This could indicate that they are either not comfortable with the current price or the business itself. However, domestic mutual funds have the capability to conduct in-depth research on companies, making their small stake a significant factor to consider.

Overall, Talbros Automotive Components has shown some positive trends and attractive valuations, but also has some areas of concern such as poor long-term growth and low interest from domestic mutual funds. Investors may want to hold onto their positions for now and keep an eye on the company's future performance.