MOTHERSON - Swing Trade Analysis with AI Signals
Back to ListSwing Trade Rating: 3.2
| Stock Code | MOTHERSON | Market Cap | 1,17,976 Cr. | Current Price | 112 ₹ | High / Low | 136 ₹ |
| Stock P/E | 60.1 | Book Value | 36.2 ₹ | Dividend Yield | 0.51 % | ROCE | 5.16 % |
| ROE | 4.33 % | Face Value | 1.00 ₹ | DMA 50 | 121 ₹ | DMA 200 | 112 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | 0.59 % | PAT Qtr | 230 Cr. | PAT Prev Qtr | 732 Cr. |
| RSI | 37.2 | MACD | -2.71 | Volume | 1,90,47,437 | Avg Vol 1Wk | 2,05,80,383 |
| Low price | 71.5 ₹ | High price | 136 ₹ | PEG Ratio | 7.85 | Debt to equity | 0.18 |
| 52w Index | 62.3 % | Qtr Profit Var | 89.0 % | EPS | 1.86 ₹ | Industry PE | 23.7 |
📊 MOTHERSON trades at ₹112, equal to its 200DMA and below its 50DMA (₹121). Technical indicators (RSI 37.2, MACD -2.71) suggest weak momentum. Fundamentals show low ROE and ROCE, expensive valuation compared to industry PE, and sharp decline in quarterly profits. Despite moderate debt and decent institutional support, this stock is a cautious swing trade candidate.
💡 Optimal Entry Price: Around ₹108–112 (near 200DMA support).
🔔 Exit Strategy if Holding: Consider exiting near ₹120–122 (around 50DMA resistance) unless momentum improves.
✅ Positive
- Debt-to-equity ratio is low at 0.18, ensuring financial stability.
- DII holdings increased by 0.59%, showing domestic investor confidence.
- Quarterly profit variation shows 89% growth compared to prior year base.
- Dividend yield of 0.51% provides some income support.
⚠️ Limitation
- High P/E of 60.1 compared to industry PE of 23.7.
- Weak profitability: ROE 4.33%, ROCE 5.16%.
- EPS of only ₹1.86 indicates limited earnings power.
- PEG ratio of 7.85 suggests overvaluation relative to growth.
📉 Company Negative News
- Quarterly PAT fell sharply from ₹732 Cr. to ₹230 Cr.
- Weak technicals: RSI near oversold, MACD negative.
- Price trading below 50DMA resistance.
- FII holdings decreased by 0.24%, showing reduced foreign confidence.
📈 Company Positive News
- Moderate debt levels support financial resilience.
- DII confidence reflected in increased holdings.
- Dividend yield offers minor investor support.
🏭 Industry
- Industry PE at 23.7, much lower than MOTHERSON’s valuation.
- Auto components sector remains cyclical, tied to global demand and supply chain stability.
- Domestic auto industry growth supports long-term fundamentals but margins remain pressured.
🔎 Conclusion
MOTHERSON is financially stable with low debt but suffers from weak profitability, expensive valuation, and poor technicals. It is a cautious swing trade candidate if entered near ₹108–112 with a target around ₹120–122. Risk management is essential due to declining profits and overvaluation compared to industry peers.