Hexa Tradex Downgraded to 'Sell' by MarketsMOJO

Hexa Tradex, a microcap trading company, has recently been downgraded to a 'Sell' by MarketsMOJO on December 20, 2023. This downgrade is based on several factors that indicate a negative outlook for the company.
One of the main reasons for the downgrade is the company's high Debt to EBITDA ratio of -1.00 times, which indicates a low ability to service its debt. Additionally, the company's Return on Equity (avg) of 0.26% is also quite low, showing a lack of profitability per unit of shareholders' funds.

In terms of financial performance, Hexa Tradex has shown flat results in September 2023, with its lowest operating cash flow at Rs -22.99 crore. Its PBT LESS OI(Q) has also fallen by -68.3%, and its PAT(Q) has fallen by -85.2%. With a ROE of 1.8, the company's valuation is considered very expensive, with a price to book value of 0.3.

Furthermore, the stock has underperformed the market (BSE 500) in the last year, generating negative returns of -5.82% while the market has generated returns of 18.57%. This underperformance is also reflected in the company's technical trend, which is currently sideways with no clear price momentum.

It is worth noting that despite its size, domestic mutual funds hold only 0.1% of the company, which could indicate a lack of confidence in the company's performance or business. This is significant as domestic mutual funds have the capability to conduct in-depth research on companies.

On a positive note, Hexa Tradex has shown healthy long-term growth with its net sales growing at an annual rate of 360.48% and operating profit at 148.33%. However, this does not seem to be enough to outweigh the negative factors affecting the company's stock.

In conclusion, the downgrade of Hexa Tradex's stock to 'Sell' by MarketsMOJO is based on its high debt, low profitability, underperformance in the market, and lack of confidence from domestic mutual funds. Investors should carefully consider these factors before making any decisions regarding this microcap trading company.