Broad Market Evaluation Changes and Trends

Between 2 and 6 February 2026, the market experienced 629 score grade changes, comprising 351 upgrades and 278 downgrades. These adjustments spanned a diverse range of stocks, including seven large-cap, three mid-cap, and two small-cap companies, underscoring a broad-based reassessment of stock fundamentals and technical factors.

Of the total grade changes, 109 were driven by fundamental factors—70 related to financial grades and 39 to quality grades—while the remaining majority were influenced by technical and valuation considerations. The volume of dot rating updates reached 1,848, reflecting active recalibration of stock evaluations across the market.

Sector-wise, the Garments & Apparels industry recorded the highest number of upgrades with 30 stocks improving their evaluations. Conversely, the Non Banking Financial Company (NBFC) sector saw the most downgrades, with 28 stocks experiencing downward revisions. Pharmaceuticals & Biotechnology also featured prominently with 15 upgrades, indicating selective optimism in healthcare-related equities.

Featured Stocks and Market Capitalisation Breakdown

The week’s rating revisions included notable large-cap stocks such as Bajaj Auto Ltd., Larsen & Toubro Ltd., SBI Life Insurance Company Ltd, Piramal Finance Ltd, Adani Power Ltd, Indian Oil Corporation Ltd, and Union Bank of India. Mid-cap companies with significant evaluation changes included UPL Ltd., Nippon Life India Asset Management Ltd, and Canara Bank. Small-cap stocks like Rashi Peripherals Ltd and eClerx Services Ltd also featured prominently in the score adjustments.

Bajaj Auto Ltd. saw a positive score adjustment, reflecting improved investor sentiment in the automobile sector. Conversely, Larsen & Toubro Ltd. and SBI Life Insurance Company Ltd experienced downward revisions, indicating a more cautious outlook despite their large-cap status. Indian Oil Corporation Ltd and Union Bank of India both recorded upward score changes, signalling renewed confidence in energy and banking sectors respectively.

Among mid-caps, UPL Ltd. and Nippon Life India Asset Management Ltd showed positive evaluation changes, aligning with sectoral strength in agrochemicals and capital markets. Canara Bank’s upgrade also highlights improving fundamentals in public sector banking. Small-cap stocks such as Rashi Peripherals Ltd and eClerx Services Ltd demonstrated notable upward revisions, suggesting potential opportunities in IT hardware and commercial services.

Fundamental Drivers Behind Financial and Quality Grade Changes

Fundamental score changes were concentrated in 70 financial grade and 39 quality grade revisions. Financial grade changes included companies like GPT Infraprojects Ltd and Ashoka Buildcon Ltd in construction, Somany Ceramics Ltd in diversified consumer products, and Accelya Solutions India Ltd in software consulting. These adjustments reflect reassessments of financial health, earnings quality, and balance sheet strength.

Quality grade changes, which assess operational and business quality factors, affected stocks such as Orbit Exports Ltd in garments, Indraprastha Medical Corporation Ltd in healthcare, and Hester Biosciences Ltd in pharmaceuticals. Several companies moved from strong sell to sell categories, indicating marginal improvements but continued caution regarding business fundamentals.

The Garments & Apparels sector’s predominance in upgrades suggests improving operational metrics or market positioning, while the NBFC sector’s downgrades may be linked to credit risk concerns or regulatory pressures. Pharmaceuticals & Biotechnology upgrades point to selective strength in innovation or pipeline developments.

Sectoral Context and Market Implications

The predominance of upgrades in Garments & Apparels and Pharmaceuticals & Biotechnology contrasts with downgrades concentrated in NBFCs and Industrial Manufacturing. This divergence reflects sector-specific challenges and opportunities. Garments & Apparels may be benefiting from improving export demand and cost efficiencies, while NBFCs face headwinds from tightening credit conditions and regulatory scrutiny.

Industrial Manufacturing downgrades, including companies like MIC Electronics Ltd and others, suggest ongoing operational pressures or subdued demand in capital goods. The mixed performance among large-cap stocks indicates that while some marquee names are gaining favour, others are under closer evaluation amid macroeconomic uncertainties.

Compared to previous weeks, the current balance of more upgrades than downgrades may indicate a cautiously optimistic market stance, though the absence of a clear upgrade-to-downgrade ratio and lack of explicit market sentiment data suggest ongoing volatility and selective stock picking.

Forward-Looking Analysis and Upcoming Catalysts

Looking ahead, investors should monitor upcoming earnings releases, sector-specific policy announcements, and macroeconomic data that could influence further score adjustments. Large-cap stocks such as Bajaj Auto Ltd and Indian Oil Corporation Ltd may react to quarterly results and commodity price movements, while mid-cap and small-cap stocks like UPL Ltd and Rashi Peripherals Ltd could be sensitive to sectoral demand trends and technological developments.

Technical patterns and valuation metrics will continue to play a significant role in driving score changes, especially given that 90% of this week’s adjustments were influenced by technical grades. Stocks breaking key resistance levels or showing volume surges may attract positive revisions, while those facing headwinds could see further downgrades.

Investors should also watch for evolving credit conditions impacting NBFCs and closely analyse fundamental reports for companies in the Garments & Apparels and Pharmaceuticals sectors to identify sustainable growth opportunities.

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