Fundamentally strong companies have strong financials, such as a considerable profit growth,low debt-to-equity ratio and consistent cash flow. Those companies that will continue to grow and be in business no matter the market situation.
Listed below are the two fundamentally strong small-cap Auto stocks
RACL Geartech Ltd
RACL Geartech Ltd is a leading automotive gear manufacturer in India.The company has expanded its product line in Industrial Gears for Electrical Switch Gears & Circuit Breakers.
RACL Geartech Ltd is categorised as a Small-cap stock with a market capitalisation of Rs 1,455 crore.On Friday, shares closed at Rs 1,350 per share, up 2.79 percent over the previous close.
In the previous six months, the stock has increased 52 percent, and in the last year, it has gained 147 percent.
The debt-to-equity ratio for RACL Geartech is 1.21. The company’s profitability ratios are increasing, with return on equity at 22.34 percent and return on capital employed at 26.64 percent, while the company’s margins are improving, with a net profit margin of 10.44 percent.
Company’s revenue grew by 32 percent yearly, from Rs 271 crore in FY 21-22 to Rs 358 crore in FY 22-23, For the same timeframe, Net profit increased by 61 percent from Rs 23 crore to Rs 37 crore.
As per latest shareholding pattern, the company’s promoters own 53.35 percent of the stake, while retail investors own 46.58 percent.
Craftsman Automation Ltd
Craftsman is the largest player in machining of cylinder blocks for medium and heavy commercial vehicles.Company caters to automotive, industrial, and engineering industries.
The company is categorised as a Small-cap stock with a market capitalisation of Rs 9,798 crore. The stock closed at Rs 4,637.50 a share on friday, up 1.73 percent from the previous close.
In the previous six months, the stock has increased by 40 percent, and in the last year, it has increased by 74 percent.
Craftsman Automation’s debt-to-equity ratio is 0.72. The company’s return on equity is 17.33 percent and its return on capital employed is 19.41 percent, and its margins are improving year on year.
The company’s sales climbed by 12 percent to Rs 755 crore in Q1FY24, compared to Rs 675 crore in the same quarter last year, but net profit decreased by 2 percent to Rs 55 crore in the current quarter, compared to Rs 54 crore in the same quarter last year.
According to the latest shareholding pattern, the company’s promoters own 54.99 percent of the stake, while Foreign institutional investors own 12.1 percent.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
