Haryana Leather Chemicals Ltd is Rated Strong Sell

Understanding the Current Rating

The Strong Sell rating assigned to Haryana Leather Chemicals Ltd indicates a cautious stance for investors, signalling that the stock currently exhibits multiple weaknesses across key evaluation parameters. This rating is a comprehensive reflection of the company’s present financial health, market valuation, and technical momentum rather than a mere historical snapshot. Investors should interpret this as a recommendation to avoid or exit positions until material improvements are observed.

Quality Assessment: Below Average Fundamentals

As of 26 December 2025, Haryana Leather Chemicals Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with an average Return on Equity (ROE) of just 5.84%. This modest ROE suggests limited efficiency in generating profits from shareholders’ equity. Over the past five years, net sales have grown at an annualised rate of 12.62%, while operating profit has increased by 14.39% annually. Although these growth rates are positive, they are not sufficiently robust to inspire confidence in sustained expansion or superior profitability.

Moreover, the company’s recent profitability has deteriorated. The latest nine-month Profit After Tax (PAT) figure stands at ₹1.48 crore, reflecting a sharp decline of 56.55% compared to previous periods. This contraction in earnings highlights operational challenges and pressures on margins, further weighing on the company’s quality score.

Valuation: Very Expensive Relative to Fundamentals

Currently, Haryana Leather Chemicals Ltd is considered very expensive based on its valuation metrics. The stock trades at a Price to Book (P/B) ratio of 0.7, which is a premium compared to its peers’ historical averages. This elevated valuation is concerning given the company’s subdued profitability and flat financial trends. Investors are effectively paying a higher price for a stock that has not demonstrated commensurate earnings growth or operational improvement.

Adding to valuation concerns, the company’s ROE has declined to 4.8%, signalling diminished returns on equity capital. Over the past year, the stock has delivered a negative return of 28.10%, substantially underperforming the broader market benchmark BSE500, which has generated a positive 5.70% return over the same period. This divergence emphasises the stock’s relative weakness and the risk premium embedded in its current price.

Financial Trend: Flat and Underwhelming Performance

The financial trend for Haryana Leather Chemicals Ltd is flat, reflecting stagnation in key performance indicators. The company’s earnings have contracted significantly, with profits falling by 52.7% over the last year. This decline in profitability, coupled with muted revenue growth, suggests that the company is struggling to generate sustainable cash flows or improve its operational efficiency.

Such flat financial trends undermine investor confidence and contribute to the cautious rating. The lack of positive momentum in earnings or sales growth indicates that the company faces structural or cyclical challenges that have yet to be resolved.

Technical Outlook: Bearish Momentum

From a technical perspective, Haryana Leather Chemicals Ltd exhibits a bearish grade. The stock’s price action over recent months has been weak, with a one-month decline of 12.94% and a three-month drop of 15.86%. Even the six-month performance remains negative at -11.11%. These trends suggest that market sentiment towards the stock is predominantly negative, with selling pressure outweighing buying interest.

Despite a modest one-day gain of 0.77% and a one-week rise of 7.47%, the overall technical picture remains unfavourable. The stock’s inability to sustain upward momentum or break key resistance levels reinforces the Strong Sell rating from a market timing perspective.

What This Rating Means for Investors

The Strong Sell rating on Haryana Leather Chemicals Ltd serves as a clear caution for investors. It reflects a consensus view that the stock currently faces significant headwinds across quality, valuation, financial performance, and technical momentum. Investors should be wary of entering new positions or holding existing ones without a clear catalyst for improvement.

For those considering exposure to the commodity chemicals sector, it is prudent to seek companies with stronger fundamentals, more attractive valuations, and positive financial trends. Haryana Leather Chemicals Ltd’s current profile suggests that it is not well positioned to deliver favourable returns in the near term.

Monitoring the company’s quarterly results, operational developments, and market conditions will be essential to reassess its outlook. Until then, the Strong Sell rating remains a prudent guide for risk-averse investors.

Summary of Key Metrics as of 26 December 2025

• Mojo Score: 16.0 (Strong Sell)


• Market Capitalisation: Microcap


• Return on Equity (ROE): 4.8% (declining)


• Price to Book Value: 0.7 (very expensive relative to peers)


• Profit After Tax (9M): ₹1.48 crore, down 56.55%


• Stock Returns: 1 Year -28.10%, YTD -25.63%


• Sector: Commodity Chemicals

Investors should weigh these factors carefully when considering Haryana Leather Chemicals Ltd within their portfolios.

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