Hawa Engineers Receives 'Sell' Rating from MarketsMOJO Due to Weak Fundamentals

Hawa Engineers, a microcap company in the industrial equipment engineering industry, has recently received a 'Sell' rating from MarketsMOJO on September 16, 2024. This downgrade is based on the company's weak long-term fundamental strength, with a low 4.68% CAGR growth in operating profits over the last 5 years. Additionally, Hawa Engineers has a poor ability to service its debt, with a low EBIT to Interest ratio of 1.62.
Despite declaring positive results for the last 3 consecutive quarters, the company's profitability per unit of shareholders' funds is low, with a Return on Equity of 7.70%. On a positive note, the company has a high ROCE of 13.99% and a higher PAT of Rs 1.74 Cr in the last 9 months. It also has a strong cash position, with Rs 9.44 Cr in cash and cash equivalents.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The stock's technical trend has also deteriorated since September 16, 2024, generating a -0.03% return. With an ROCE of 17.1, the stock is currently trading at an attractive valuation with a 2.4 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations.

Despite generating a return of 51.11% in the past year, the company's profits have only risen by 127%, resulting in a low PEG ratio of 0.2. The majority shareholders of Hawa Engineers are the promoters, and the company has consistently outperformed the BSE 500 index in the last 3 annual periods.

In conclusion, while Hawa Engineers may have some positive aspects, the overall outlook for the company is not strong, leading to the 'Sell' rating from MarketsMOJO. Investors should carefully consider these factors before making any investment decisions.