A company is said to be ‘fundamentally strong’ when it portrays a specific set of characteristics, viz, strong and consistent financials, low leverage ratios, and many more.
Listed below is one such fundamentally strong stock under the ‘mid-cap’ category that is currently trading at a discount of around 17 percent from its 52-week high level:
Honeywell Automation India Limited
With a market capitalization of Rs 32,344.10 crores, the stocks of Honeywell Automation India Limited started their trading session on Thursday at Rs 36,867.65 and currently trade at Rs 36,582.05, slipping 0.40 percent as compared to the previous close of Rs 36,736.15 apiece.
The company’s stock hit its 52-week high in July 2023 at Rs 44,150, and, as compared to that level, the current stock price exhibit a discount of around 17 percent.
Having a glance at the financials of the company, the operating revenues, as well as net profit figures, showcased an increase with the former shifting from Rs 932.32 crores during Q1FY23-24 to Rs 1,104.2 crores during Q2FY23-24, and, the latter, during the same period, rose from Rs 103.44 crores to Rs 121.9 crores.
Moreover, the basic profitability ratios of the company, viz, the return on equity (RoE) and the return on capital employed (RoCE), showed positive movements with the former taking a shift from 12.56 percent during FY21-22 to 14.59 percent during FY22-23, and, the latter, keeping the timeframe the same, moved from 17.16 percent to 19.72 percent.
Since the past two financial years, the company has slightly increased its debt-to-equity ratio to 0.01 times. The company also reported a drastic change in its interest coverage ratio from 53.54 during FY21-22 to 91.96 during FY22-23.
According to the latest shareholding pattern data available for the September 2023 quarter, the company’s Promoters hold a 75 percent stake, and the Foreign Institutional Investors (FIIs), recently increasing their stake, currently hold a 3.15 percent stake in the company.
Honeywell Automation India Limited is engaged in the business of providing automation & control systems within as well as outside India. The company primarily offers control systems, programmable logic controllers, advanced software solutions, transmitters, emergency shutdown systems, and comprehensive life cycle services.
Written by Amit Madnani
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