What should investors do with SKF India? Know more about the stock here!

What should investors do with SKF India? Know more about the stock here!

Indian Market
by 5paisa Research Team Last Updated: 2022-11-11T12:26:26+05:30

The stock is a hot topic lately as it soared nearly 9% this week.

The global cues have been uncertain and the broader market has been subjected to frequent gap-up and gap-down openings recently. Despite the volatility, quality midcap and smallcap stocks continue to be the centre of attraction as strong buying sentiment is seen across these stocks. One such stock is SKF India (NSE Code: SKFINDIA) which has jumped nearly 9%, backed by strong buying activity.

SKF India is primarily engaged in manufacturing bearing and allied components for the automotive sector and other industries. It is a midcap company with a market capitalization of about Rs 25,000 crore, providing industry-leading automotive and industrial-engineered solutions. In its recent quarterly results, the company posted an 11% YoY jump in revenue to Rs 1078 crore, while net profit grew 32% YoY to Rs 155 crore in September 2022. A good rise of 32% has been seen in EPS.

Technically, the stock has bounced from its 20-week MA with strong volumes after a counter-trend consolidation pattern. It is just 3% away from its all-time high level of Rs 5052 on NSE. The 14-period daily RSI (68.44) indicates strong strength in the stock. The ADX (26.13) has started to move upwards and shows rising strength. The MACD histogram has risen over the past few days and shows good upside potential. The OBV is at its peak and indicates strong strength from a volume perspective. Overall, the stock is technically strong and is expected to trade higher in the medium term.

On a YTD basis, the stock has generated 30% returns to its shareholders. With the auto sector picking up pace in India, we can expect good performance from this company given its strong presence in bearing manufacturing. The stock is at an attractive price for the long term, and investors as well as momentum traders can keep a close watch over this stock for times to come.

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