MarketsMOJO Downgrades Hisar Metal Industries to 'Sell' Amidst Negative Outlook

Hisar Metal Industries, a microcap company in the iron and steel industry, has recently been downgraded to a 'Sell' by MarketsMOJO on September 2, 2024. This decision was based on several factors that indicate a negative outlook for the company.
One of the main reasons for the downgrade is the company's high Debt to EBITDA ratio of 3.84 times, which indicates a low ability to service debt. This, coupled with poor long-term growth in net sales and operating profit, with annual growth rates of only 2.99% and 5.19% respectively over the last 5 years, does not bode well for the company's financial health.

In addition, Hisar Metal Industries has declared negative results for the last 6 consecutive quarters, with a significant increase in interest expenses and a decrease in profits. The company's stock is also currently in a mildly bearish range, with the technical trend deteriorating from mildly bullish on September 2, 2024. The key technical factor, Bollinger Band, has been bearish since the same date.

Furthermore, the stock has underperformed the market in the last 1 year, generating a return of only 3.36% compared to the market's return of 38.49%. This indicates a lack of investor interest and confidence in the company's performance.

On a positive note, Hisar Metal Industries has an attractive valuation with a ROCE of 10.1 and a 1.3 Enterprise value to Capital Employed. However, this does not seem to be enough to offset the negative factors affecting the company's stock.

It is also worth noting that the majority shareholders of Hisar Metal Industries are the promoters, which may raise concerns about the company's corporate governance and decision-making.

In conclusion, based on the current financial and technical indicators, MarketsMOJO has downgraded the stock of Hisar Metal Industries to 'Sell'. Investors should carefully consider these factors before making any investment decisions.