Hindustan Motors Receives 'Sell' Rating from MarketsMOJO Due to Negative Outlook.

Hindustan Motors, a microcap company in the passenger car industry, has recently received a 'Sell' rating from MarketsMOJO on October 30, 2024. This downgrade is due to several factors that indicate a negative outlook for the company.
One of the main reasons for the 'Sell' rating is the company's high Debt to EBITDA ratio of -1.00 times, which indicates a low ability to service debt. This, coupled with the fact that the company has reported losses and has a negative net worth, does not bode well for investors. The company will either have to raise fresh capital or report profits in order to sustain itself in the future.

In addition, Hindustan Motors has shown poor long-term growth with an annual rate of only 14.08% in operating profit over the last 5 years. The stock is also currently in a Mildly Bearish range, with technical factors such as MACD and KST also showing a Bearish trend.

Furthermore, the company's negative EBITDA and a PEG ratio of 0 indicate a risky investment compared to its historical valuations. Despite being a microcap company, domestic mutual funds hold only 0.05% of the company, which could suggest that they are not comfortable with the current price or the business itself.

On a positive note, Hindustan Motors has declared positive results for the last 3 consecutive quarters, with a higher PAT (HY) of Rs 24.18 crore, the highest ROCE (HY) at 155.05%, and the highest CASH AND CASH EQUIVALENTS (HY) at Rs 21.65 crore. However, this does not seem to be enough to outweigh the negative factors affecting the company's stock.

Despite the market beating performance of 58.81% in the last year, which is higher than the market (BSE 500) returns of 34.53%, the overall outlook for Hindustan Motors remains negative. Investors should carefully consider these factors before making any investment decisions regarding this microcap company in the passenger car industry.