Wheels India . Upgraded to 'Hold' Rating by MarketsMOJO After Positive Financial Results

Wheels India ., a smallcap auto ancillary company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This decision was based on the company's positive financial results for the last three consecutive quarters. In the half-year period, the company's profits have grown by an impressive 236.63%, with a highest ROCE of 15.23% and a low debt-to-equity ratio of 0.86 times.
Technically, the stock is currently in a mildly bullish range, with its trend improving from sideways on 26-Nov-24. Multiple factors such as RSI, MACD, and Bollinger Band also indicate a bullish sentiment for the stock. Additionally, with an ROCE of 14.5, the stock is currently trading at an attractive valuation with a 1.5 enterprise value to capital employed.

However, the company's long-term fundamental strength is weak, with an average ROCE of 8.43% and poor growth in net sales and operating profit over the last five years. The company also has a high debt-to-EBITDA ratio of 3.70 times, indicating a low ability to service debt.

Institutional investors have also decreased their stake in the company by -0.56% over the previous quarter, holding only 12.41% collectively. This could be due to their better capability and resources to analyze the company's fundamentals compared to retail investors.

In the last year, the stock has underperformed the market, generating a return of only 5.81% compared to the market's (BSE 500) return of 27.33%. While the company's profits have risen by 98.6%, the PEG ratio of 0.2 suggests that the stock is currently trading at a discount compared to its average historical valuations.

Overall, while Wheels India . has shown positive results in the short term, its long-term fundamentals and performance have been weak. Therefore, MarketsMOJO has upgraded the stock to a 'Hold' rating, suggesting a cautious approach for investors.