Haryana Leather Chemicals Downgraded to 'Sell' by MarketsMOJO, Despite Recent Positive Results

Haryana Leather Chemicals, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 1st, 2024. This decision was based on several factors, including weak long-term fundamental strength with an average Return on Equity (ROE) of 5.74%, poor long-term growth with net sales and operating profit only growing at an annual rate of 5.35% and 3.25% respectively over the last 5 years, and a weak ability to service its debt with a poor EBIT to Interest (avg) ratio of 1.06.
However, the company has declared positive results for the last 3 consecutive quarters, with a higher PAT (HY) of Rs 3.02 crore, the highest ROCE (HY) at 13.79%, and the highest DEBTORS TURNOVER RATIO (HY) at 4.75 times. Technically, the stock is in a mildly bullish range, with both the MACD and KST technical factors also being bullish.

At a ROE of 11.2, the stock has a fair valuation with a 1.2 price to book value. It is currently trading at a fair value compared to its average historical valuations. In the past year, the stock has generated a return of 125.67%, with profits rising by 144.7%. The PEG ratio of the company is 0.1, indicating a market-beating performance.

Investors should take note of the recent downgrade and consider the company's weak long-term fundamentals before making any investment decisions. However, the positive results in the last 3 quarters and the stock's market-beating performance in the past year may still make it an attractive option for some investors. As always, it is important to do thorough research and consult with a financial advisor before making any investment decisions.