Harish Textile Engineers Downgraded to 'Sell' by MarketsMOJO Due to High Debt and Weak Fundamentals

Harish Textile Engineers, a microcap company in the textile machinery industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 1st, 2024. This decision was based on the company's high debt and weak long-term fundamental strength. With a debt to equity ratio of 4.15 times, the company's profitability per unit of total capital has been low, with an average return on capital employed of 5.52%.
In addition, the company's net sales for the quarter ending in June 2024 have fallen by 6.1%, at Rs 30.76 crore. However, the stock is currently in a bullish range and has shown a technical improvement since September 18th, 2024, generating a return of 50.49%. Multiple technical factors such as MACD, Bollinger Band, KST, DOW, and OBV are also indicating a bullish trend for the stock.

Despite this, the company's ROCE of 10.7 suggests a fair valuation with a 1.5 enterprise value to capital employed. The stock is currently trading at a discount compared to its historical valuations. However, while the stock has generated a return of 102.17% in the past year, its profits have fallen by 57%.

It is worth noting that the majority of the company's shareholders are non-institutional investors. Despite the recent downgrade, Harish Textile Engineers has shown market-beating performance with a return of 102.17% in the last year, significantly higher than the market (BSE 500) returns of 39.61%. Investors should carefully consider these factors before making any decisions regarding this microcap company in the textile machinery industry.