Hawa Engineers receives 'Hold' rating from MarketsMOJO, shows strong financial performance in recent quarters

Hawa Engineers, a microcap company in the engineering industry, has recently received a 'Hold' rating from MarketsMOJO on October 17, 2024. This upgrade is based on the company's positive financial performance in the last four consecutive quarters.
The company's profits after tax (HY) have shown a significant growth of 219.57%, reaching Rs 1.47 crore. Additionally, its net sales (Q) have reached a high of Rs 35.36 crore. These positive results have contributed to the stock's technical trend, which has improved from mildly bullish to a bullish range since October 3, 2024. This has resulted in a return of 49.67% for investors.

Furthermore, multiple technical indicators such as MACD, Bollinger Band, KST, DOW, and OBV are all showing bullish signals for the stock. With a ROCE of 17.1, the stock is currently trading at a fair valuation with a 3.7 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations.

The majority shareholders of Hawa Engineers are the promoters, indicating their confidence in the company's growth potential. The stock has consistently outperformed BSE 500 in the last three annual periods, generating a return of 175.55%.

However, the company's long-term fundamental strength is weak, with a CAGR growth of only 18.45% in operating profits over the last five years. Its ability to service its debt is also poor, with a low EBIT to interest ratio of 1.55. Additionally, the company's return on equity is at 7.25%, indicating low profitability per unit of shareholders' funds.

In conclusion, while Hawa Engineers has shown positive financial performance in the last four quarters and has a bullish technical trend, its long-term fundamental strength and debt-servicing ability are areas of concern. Investors are advised to hold their positions and monitor the company's performance closely.