Harrisons Malayalam Receives 'Hold' Rating and Shows Healthy Long-Term Growth

Harrisons Malayalam, a microcap company in the tea/coffee industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's healthy long-term growth, with an annual operating profit growth rate of 40.86%. Additionally, the stock is currently in a bullish range, with technical indicators such as MACD, Bollinger Band, KST, and OBV all showing positive trends.
The majority shareholders of Harrisons Malayalam are the promoters, which is a positive sign for investors. The company has also shown market-beating performance in both the long-term and near-term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months. However, there are some concerns regarding the company's ability to service its debt, as it has a high Debt to EBITDA ratio of 4.25 times.

In the latest quarter, the company reported negative results, with a 20% decrease in net sales and a significant decline in profits. The return on capital employed (ROCE) for the first half of the year was also at its lowest at 5.55%. With a ROCE of 1.9, the stock is currently trading at a very expensive valuation, with an enterprise value to capital employed ratio of 2.4.

Despite these concerns, the stock is currently trading at a fair value compared to its historical valuations. In the past year, while the stock has generated a return of 80.29%, its profits have only increased by 16.3%. This indicates that the stock may have already reached its peak and may not have much room for further growth. Investors should carefully consider these factors before making any investment decisions regarding Harrisons Malayalam.