Hardwyn India Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Underperformance

Hardwyn India, a smallcap company in the aluminium and aluminium products industry, has recently been downgraded to a 'Sell' by MarketsMOJO. This is due to several factors, including the company's high debt to EBITDA ratio of 3.02 times, indicating a low ability to service debt. Additionally, the company's return on equity (avg) of 7.76% is relatively low, showing a low profitability per unit of shareholders' funds.
The stock is also considered to be very expensive, with a price to book value of 3. Over the past year, the stock has underperformed the market, generating a return of -21.50% while its profits have only risen by 33.5%. This results in a PEG ratio of 2.8, indicating an overvalued stock.

Another concerning factor is that despite its size, domestic mutual funds hold only 0% of the company. This could suggest that they are not comfortable with the stock's price or the business itself. Furthermore, the stock has underperformed the market in the last year, generating negative returns while the market has seen a 27.32% increase.

However, there are some positive factors to consider. The company has shown healthy long-term growth, with net sales growing at an annual rate of 11.09% and operating profit at 69.11%. In addition, the company's results in September 2024 were positive, with PBT LESS OI(Q) growing at 53.7% and PAT(Q) growing at 54.5%.

From a technical standpoint, the stock's trend is currently sideways, indicating no clear price momentum. The technical trend has also deteriorated since November 25, 2024, generating -2.88% returns since then.

In conclusion, while Hardwyn India may have some positive aspects, the overall outlook for the company is not favorable. With a high debt to EBITDA ratio, low profitability, and underperformance in the market, it is understandable why MarketsMOJO has downgraded the stock to a 'Sell'. Investors should carefully consider these factors before making any decisions regarding this smallcap company.