Honeywell Automation India Downgraded to 'Sell'

Honeywell Automation India, a leading player in the electronics-components industry, has recently been downgraded to a 'Sell' by MarketsMOJO on October 9, 2023. This decision was based on various factors, including poor long-term growth with only a 6.02% increase in net sales and 6.27% in operating profit over the last 5 years. The stock is currently in a bearish range, with technical trends showing a deterioration from mildly bearish to bearish. This is supported by indicators such as MACD, Bollinger Band, and KST, all pointing towards a negative outlook for the stock. In terms of valuation, Honeywell Automation India has a high ROE of 13.9, making it a very expensive stock with a price to book value of 10.1. However, it is currently trading at a fair value compared to its historical valuations. Despite a 16% increase in profits over the past year, the stock has generated a negative return of -12.90%, resulting in a high PEG ratio of 4.5. The company has consistently underperformed against the benchmark over the last 3 years, further adding to the negative sentiment surrounding the stock. However, it does have high management efficiency with a ROE of 17.31% and a low debt to equity ratio of 0 times. Honeywell Automation India has also declared positive results for the last 5 consecutive quarters, with its operating cash flow and dividends per share at their highest levels. The company's majority shareholders are its promoters, and with a market cap of Rs 32,136 crore, it is the largest company in the electronics-components sector, constituting 38.10% of the entire industry. Its annual sales of Rs 3,903.67 crore also make up 26.77% of the industry. In conclusion, while Honeywell Automation India may have some positive aspects, the overall outlook for the stock is currently negative. Investors should carefully consider these factors before making any investment decisions.