Shree Hari Chemicals Export Receives 'Hold' Rating from MarketsMOJO Based on Positive Performance

Shree Hari Chemicals Export, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on July 24, 2024. This upgrade is based on the company's positive performance in the last 5 consecutive quarters.
In the last 9 months, the company's net sales have grown by 27.79% to reach Rs 108.52 crore, while its profits have increased to Rs 1.32 crore in the half-yearly period. The stock is currently in a mildly bullish range and its technical trend has improved from mildly bearish on July 24, 2024. This is supported by factors such as MACD, Bollinger Band, and KST.

Attractive valuation is another factor that makes this stock a 'Hold'. With a ROCE of 2.6 and an enterprise value to capital employed ratio of 1.4, the stock is trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 70.90%, outperforming the market (BSE 500) returns of 35.30%. Additionally, the PEG ratio of the company is 0.4, indicating a good balance between its stock price and earnings growth.

The majority shareholders of Shree Hari Chemicals Export are non-institutional investors, which suggests a strong market beating performance. However, the company's long-term fundamental strength is weak with a -31.90% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also poor with a negative EBIT to interest ratio of -4.59. Furthermore, the company's return on equity is low at 1.30%, indicating low profitability per unit of shareholders' funds.

In conclusion, while Shree Hari Chemicals Export has shown positive results in the recent past and has a strong market performance, its long-term fundamentals and debt-servicing ability are areas of concern. Therefore, MarketsMOJO has upgraded its stock call to 'Hold' for now.