Hariyana Ship Breakers Receives 'Sell' Rating

Hariyana Ship Breakers, a microcap trading company, has recently received a 'Sell' rating from MarketsMOJO on January 4th, 2024. This downgrade is based on the company's weak long-term fundamental strength, poor ability to service its debt, and low profitability per unit of shareholders' funds.
One of the main reasons for the 'Sell' rating is the company's -121.77% CAGR growth in operating profits over the last 5 years. Additionally, the company's EBIT to Interest (avg) ratio of 0.91 indicates a weak ability to service its debt. Furthermore, the company's Return on Equity (avg) of 3.76% is relatively low, showing low profitability.

Another concerning factor is the company's negative EBITDA, making the stock a risky investment. The stock is also trading at a higher risk compared to its average historical valuations. Although the stock has generated a return of 61.15% in the past year, its profits have only risen by 328.1%, resulting in a PEG ratio of 0.

On a positive note, the company declared very positive results in September 2023, with a growth in net sales of 60.89%. The company's net sales (Q) were the highest at Rs 90.84 crore, while PBT LESS OI (Q) and PAT (Q) were also at their highest at Rs 3.66 crore and Rs 5.92 crore, respectively.

Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, KST, and OBV being bullish. The majority shareholders of the company are promoters, indicating their confidence in the company's future.

Despite the recent downgrade, Hariyana Ship Breakers has a market-beating performance in the long term as well as the near term. Along with generating a return of 61.15% in the last year, the stock has also outperformed BSE 500 in the last 3 years, 1 year, and 3 months. However, investors should carefully consider the company's weak fundamental strength and high risk before making any investment decisions.