Shree Hari Chemicals Export Downgraded to 'Sell' by MarketsMOJO Due to Weak Fundamentals

Shree Hari Chemicals Export, a microcap company in the chemicals industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 25, 2024. This decision was based on the company's weak long-term fundamental strength, with a -31.90% CAGR growth in operating profits over the last 5 years. Additionally, the company's ability to service its debt is poor, with a low EBIT to Interest ratio of -4.59. This signifies a potential risk for investors.
Furthermore, the company has only been able to generate a low Return on Equity of 1.30%, indicating low profitability per unit of shareholders' funds. However, the company has declared positive results for the last 5 consecutive quarters, with a growth of 27.79% in net sales and a higher PAT of Rs 1.32 crore in the last half year.

Technically, the stock is currently in a mildly bullish range, with a positive trend since July 24, 2024, generating a return of 9.72%. Multiple factors, such as MACD, Bollinger Band, and KST, suggest a bullish outlook for the stock.

With a ROCE of 2.6, the stock is fairly valued, with an enterprise value to capital employed ratio of 1.5. It is also trading at a discount compared to its average historical valuations. However, despite a high return of 88.03% in the last year, the company's profits have only risen by 101.2%, resulting in a low PEG ratio of 0.4.

The majority of the company's shareholders are non-institutional, and the stock has outperformed the market (BSE 500) with a return of 88.03% in the last year, compared to the market's return of 35.03%. Overall, while the company has shown some positive results, the downgrade to 'Sell' by MarketsMOJO suggests caution for potential investors.