Haryana Leather Chemicals Receives 'Hold' Rating from MarketsMOJO Based on Positive Financial Results

Haryana Leather Chemicals, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on September 9, 2024. This upgrade is based on the company's positive financial results for the last three consecutive quarters.
In the half-yearly results, the company's profit after tax (PAT) has increased to Rs 3.02 crore, while the return on capital employed (ROCE) has reached its highest at 13.79%. Additionally, the debtors turnover ratio has also shown improvement, reaching its highest at 4.75 times.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on September 9, 2024. Multiple factors such as MACD, Bollinger Band, and KST also indicate a bullish trend for the stock.

With a return on equity (ROE) of 11.2%, the stock is currently trading at a fair value with a price to book value of 1.3. This is in line with its average historical valuations. In the past year, the stock has generated a return of 108.81%, while its profits have increased by 144.7%. The company's PEG ratio is also at a low of 0.1, indicating a potential for future growth.

In the long term, the company has shown market-beating performance, outperforming the BSE 500 index in the last three years, one year, and three months. However, the company's long-term fundamental strength is weak, with an average ROE of 5.74%. The net sales have only grown at an annual rate of 5.35%, and the operating profit at 3.25% over the last five years. Additionally, the company's ability to service its debt is also weak, with a poor EBIT to interest ratio of 1.06.

In conclusion, while Haryana Leather Chemicals has shown positive financial results in the short term, its long-term fundamental strength and growth potential are weak. Therefore, MarketsMOJO has upgraded its rating to 'Hold' for this microcap company in the chemicals industry.