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Check Before You Invest : Harrisons Malayalam Ltd

BSE: 500467 NSE: HARRMALAYA ISIN: INE544A01019
  |   Sector:  Agriculture & Allied activities   |   Industry:  Rubber Products

Snapshot

Q.1 Which industry/sub-sector does Harrisons Malayalam Ltd belong to?
Harrisons Malayalam Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Rubber Products segment.
Q.2 Is Harrisons Malayalam Ltd a good quality company?
Harrisons Malayalam Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Harrisons Malayalam Ltd undervalued or overvalued?
Harrisons Malayalam Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 16.47 9.58
Price to Book 2.4 2.17
Price to Sales 0.79 0.64
EV to EBITDA 11.61 9.75
Q.4 Is Harrisons Malayalam Ltd a good buy now?
Harrisons Malayalam Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd revenue growth is 5.3% for FY-2025, which is below its 5-year CAGR of 5.82%, indicating slower growth.

Q.2 Gross Profit margin of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.3% for FY-2025, which is below its 5-year median of 4.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.58% for FY-2025, which is below its 5-year median of 5.6% indicating decreasing margins.

Q.4 Net Profit Margin of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Net Profit Margin is 2.9% for FY-2025, is below its 5-year median of 3.65%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.3 4.6
Operating Profit Margin (%) 4.58 5.6
Net Profit Margin (%) 2.9 3.65

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Return on Asset is 3.18%, which is in line with its 5-year historical median of 3.18%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Return on capital employed is 11.38% for FY-2025, which is below its 5-year historical median of 12.71%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Return on equity is 10% for FY-2025, which is below its 5-year historical median of 12.09%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Cash conversion cycle is -11 days, below its 5-year historical median of -4 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.1 0.85
ROE (%) 10 12.09
ROCE (%) 11.38 12.71
Cash Conversion Cycle -11 days -4 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Debt-to-Equity ratio is 0.65, which is above the industry average of 0.44, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Harrisons Malayalam Ltd?
Harrisons Malayalam Ltd Debt to cash flow from operations is 4.26, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Harrisons Malayalam Ltd?

Q.1 Promoter shareholding and pledge status of Harrisons Malayalam Ltd?
Promoters hold 54.12% of the Harrisons Malayalam Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Harrisons Malayalam Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Harrisons Malayalam Ltd vs industry peers?
Harrisons Malayalam Ltd revenue CAGR is 5.82%, compared to the industry median CAGR of 8.96%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 5.3 9
Gross Profit Growth (%) 266.7 18.5
Operating Profit Growth (%) 140 13.1
Net Profit Growth (%) 0 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.1 1.31
ROE (%) 10 5.31
ROCE (%) 11.38 7.92
Cash Conversion Cycle (days) -11.38 76

Valuation & price assessment

Q.1 Stock return of Harrisons Malayalam Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
13.3% 5.3% 23% 13.1%
Q.2 Valuation ratios of Harrisons Malayalam Ltd vs historical?
The current P/E ratio of 16.47 is higher than its historical median of 9.58, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 16.47 9.58 25.04
Price to Book 2.4 2.17 2.69
Price to Sales 0.79 0.64 1.31
EV to EBITDA 11.61 9.75 13.74

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