Harrisons Malayalam Receives 'Sell' Rating from MarketsMOJO Due to High Debt and Negative Results

Harrisons Malayalam, a microcap company in the tea/coffee industry, has recently received a 'Sell' rating from MarketsMOJO on November 19, 2024. This downgrade is due to the company's high debt to EBITDA ratio of 4.25 times, indicating a low ability to service its debt. In addition, the company has reported negative results in the June 2024 quarter, with a 20% decrease in net sales and a significant decline of 8411.1% in profits.
Furthermore, the company's return on capital employed (ROCE) for the half-year is at its lowest at 5.55%, and its current ROCE of 1.9 suggests a very expensive valuation with an enterprise value to capital employed ratio of 2.4. However, the stock is currently trading at a discount compared to its historical valuations.

On a positive note, Harrisons Malayalam has shown healthy long-term growth with an annual operating profit growth rate of 40.86%. Technically, the stock is in a mildly bullish range, with its MACD and KST technical factors also indicating a bullish trend.

The majority shareholders of the company are its promoters, and the stock has a track record of market-beating performance in both the long and near term. In the past year, the stock has generated a return of 72.04%, outperforming the BSE 500 index. This trend has continued over the last 3 years, 1 year, and 3 months, making it a potentially attractive investment option for long-term investors. However, considering the current financial situation of the company, MarketsMOJO has downgraded its stock call to 'Sell'.