MarketsMOJO Downgrades Heubach Colorants India to 'Sell' After Negative Results in June Quarter

Heubach Colorants India, a smallcap company in the dyes and pigments industry, has recently been downgraded to a 'Sell' by MarketsMOJO on August 1, 2024. This decision was based on the company's negative results in the June 2024 quarter, with a decrease of 58.3% in PBT LESS OI(Q) at Rs 4.93 crore and the lowest PAT(Q) at Rs 5.17 crore. Additionally, the company's net sales for the quarter were also at their lowest at Rs 173.38 crore.
The stock has also underperformed the market in the last year, with a return of only 13.30% compared to the market's return of 37.25% (BSE 500). However, the company does have a low Debt to Equity ratio (avg) at 0 times and has shown healthy long-term growth with an annual rate of 45.33% in operating profit.

The technical trend for the stock is currently sideways, indicating no clear price momentum. It has also deteriorated from mildly bullish on August 1, 2024, and has generated a return of -1.12% since then. With a ROE of 6.6, the stock is currently trading at an attractive valuation with a price to book value of 2.4. It is also trading at a fair value compared to its average historical valuations.

However, over the past year, while the stock has generated a return of 13.30%, its profits have fallen by -0.8%. On a positive note, there has been an increasing participation by institutional investors, with a 1.35% increase in their stake over the previous quarter. These investors have better capability and resources to analyze the fundamentals of companies, making their increased interest in Heubach Colorants India a positive sign for the company's future.