Haryana Capfin Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals and Expensive Valuation

Haryana Capfin, a microcap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on November 18, 2024. This decision was based on the company's weak long-term fundamental strength, with an average Return on Equity (ROE) of 1.38%. Additionally, the company has shown poor long-term growth, with Net Sales growing at an annual rate of 21.62% and Operating Profit at 5.66%.
One of the main reasons for the 'Sell' rating is the company's expensive valuation, with a Price to Book Value of 0.4 and a PEG ratio of 0.4. This indicates that the stock is trading at a premium compared to its historical valuations. While the stock has generated a return of 143.56% in the past year, its profits have only risen by 80.4%.

However, there are some positive factors to consider. Haryana Capfin declared very positive results in September 2024, with a growth in Operating Profit of 2308%. The company's PBDIT(Q), PBT LESS OI(Q), and PAT(Q) were all at their highest levels at Rs 6.02 cr, Rs 6.02 cr, and Rs 4.51 cr respectively.

Technically, the stock is in a mildly bullish range, with multiple factors such as MACD, KST, and OBV indicating a bullish trend. The majority shareholders of the company are the promoters, which can be seen as a positive sign.

Haryana Capfin has also consistently outperformed the BSE 500 index in the last 3 annual periods, along with generating a return of 143.56% in the past year. However, considering the current weak fundamental strength and expensive valuation, MarketsMOJO has downgraded the stock to a 'Sell'. Investors should carefully evaluate their investment decisions before investing in Haryana Capfin.