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 November 6, 2024. This downgrade is due to the company's high debt and weak long-term fundamental strength.
According to MarketsMOJO, Harish Textile Engineers has a debt to equity ratio of 4.15 times, indicating a high level of debt. In addition, the company's return on capital employed (ROCE) has been low at 5.52%, suggesting low profitability per unit of total capital.

The company's recent financial results for the quarter ending June 2024 also show a decline in net sales by 6.1% to Rs 30.76 crore. However, the stock is currently in a bullish range and has shown a technical improvement since September 18, 2024, generating a return of 51.26%.

Despite this, the stock is trading at a discount compared to its historical valuations and has a fair valuation with an enterprise value to capital employed ratio of 1.5. However, the company's profits have fallen by 57% in the past year, while the stock has generated a return of 84.01%.

The majority shareholders of Harish Textile Engineers are non-institutional investors. The company has also shown a market-beating performance in the long term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

In conclusion, while Harish Textile Engineers may have shown a bullish trend in the stock market, its high debt and weak fundamental strength make it a risky investment. Investors are advised to carefully consider these factors before making any decisions.