MarketsMOJO downgrades Harish Textile Engineers due to high debt and weak fundamentals

Harish Textile Engineers, a microcap company in the textile machinery industry, has recently received a 'Sell' rating from MarketsMOJO on October 10, 2024. This downgrade is due to the company's high debt and weak long-term fundamental strength.
With a debt to equity ratio of 4.15 times, Harish Textile Engineers is considered a high debt company. This means that the company has a significant amount of debt compared to its equity, which can be a cause for concern for investors. Additionally, the company's return on capital employed (ROCE) is only 5.52%, indicating low profitability per unit of total capital.

In the latest quarter, the company's net sales have fallen by 6.1% to Rs 30.76 crore. This flat performance is another factor contributing to the 'Sell' rating.

On a positive note, the stock is currently in a bullish range and has shown a 57.14% return since September 18, 2024. Technical indicators such as MACD, Bollinger Band, KST, DOW, and OBV are also showing bullish signals for the stock.

Despite its fair valuation with a 1.5 enterprise value to capital employed, the stock is currently trading at a discount compared to its historical valuations. However, the company's profits have fallen by 57% in the past year, despite generating a return of 108.01%.

Harish Textile Engineers has majority shareholders who are non-institutional investors. This means that the company may not have the support of large institutional investors, which could impact its stock performance.

In the long term, Harish Textile Engineers has outperformed the BSE 500 index, generating a return of 108.01% in the last year and outperforming the index in the last 3 years, 1 year, and 3 months. However, with the recent downgrade from MarketsMOJO, investors may want to carefully consider their investment in this microcap company.