Alembic Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO’s current rating of 'Sell' for Alembic Ltd indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing exposure or avoiding new purchases at this time. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s attractiveness and risk profile in the present market environment.

Quality Assessment

As of 02 February 2026, Alembic Ltd holds an average quality grade. This reflects a stable but unremarkable operational and business profile. The company’s return on equity (ROE) stands at 12.8%, which is moderate and indicates that the company is generating reasonable profits relative to shareholder equity. While this level of profitability is respectable, it does not stand out strongly against peers in the realty sector, which may have higher or more consistent returns. Investors should note that average quality suggests the company is neither a clear leader nor a laggard in its industry.

Valuation Considerations

The valuation grade for Alembic Ltd is classified as very expensive. Currently, the stock trades at a price-to-book (P/B) ratio of 0.9, which might appear reasonable at first glance. However, when compared to its historical valuations and sector peers, this valuation is considered stretched given the company’s growth prospects and profitability metrics. The price-earnings-to-growth (PEG) ratio of 1.7 further indicates that the stock’s price is high relative to its earnings growth potential. This expensive valuation reduces the margin of safety for investors and suggests limited upside potential from current levels.

Financial Trend and Performance

Financially, Alembic Ltd shows a positive trend with profits rising by 4.4% over the past year. This indicates that the company is managing to grow its earnings despite challenging market conditions. However, this improvement in profitability has not translated into positive stock returns. As of 02 February 2026, the stock has delivered a negative return of -20.30% over the last 12 months, underperforming the broader BSE500 index and reflecting investor concerns about the company’s future prospects. The lack of domestic mutual fund ownership, currently at 0%, also signals limited institutional confidence, which can be a red flag for retail investors.

Technical Analysis

The technical grade for Alembic Ltd is bearish, indicating that the stock’s price momentum and chart patterns are currently unfavourable. Recent price movements show a decline of -0.77% on the latest trading day, with a one-month drop of -11.18% and a six-month decline of -17.62%. These trends suggest persistent selling pressure and weak investor sentiment. Technical indicators often reflect market psychology and can influence short-term trading decisions, reinforcing the cautious stance implied by the 'Sell' rating.

Stock Returns and Market Context

Examining the stock’s returns as of 02 February 2026, Alembic Ltd has experienced consistent underperformance across multiple time frames. The year-to-date return is -9.39%, while the one-year return stands at -20.30%. Over three months, the stock has declined by -7.89%, and over six months by -17.62%. This sustained negative performance contrasts with broader market indices and highlights the challenges faced by the company in regaining investor confidence. Such returns are critical for investors to consider when evaluating the risk-reward profile of the stock.

Implications for Investors

The 'Sell' rating on Alembic Ltd reflects a combination of average operational quality, expensive valuation, positive but insufficient financial trends, and bearish technical signals. For investors, this means that while the company is showing some earnings growth, the stock price does not currently offer an attractive entry point given its valuation and market momentum. The rating advises caution and suggests that investors may want to prioritise capital allocation towards stocks with stronger fundamentals, more reasonable valuations, and positive technical outlooks.

Company Profile and Market Capitalisation

Alembic Ltd is classified as a small-cap company operating within the realty sector. Its market capitalisation reflects its size relative to larger peers, which can influence liquidity and volatility. Small-cap stocks often carry higher risk but can offer growth opportunities if fundamentals improve. However, Alembic’s current financial and technical indicators suggest that investors should remain cautious until clearer signs of recovery emerge.

Summary of Key Metrics

To summarise the key metrics as of 02 February 2026:

• Mojo Score: 36.0 (Sell grade)
• Return on Equity (ROE): 12.8%
• Price to Book Value (P/B): 0.9
• PEG Ratio: 1.7
• Profit Growth (1 year): +4.4%
• Stock Returns (1 year): -20.30%
• Domestic Mutual Fund Holding: 0%
• Technical Grade: Bearish

These figures collectively underpin the current 'Sell' rating, highlighting valuation concerns and weak price momentum despite modest profit growth.

Looking Ahead

Investors considering Alembic Ltd should monitor upcoming quarterly results and sector developments closely. Improvements in operational efficiency, earnings growth acceleration, or a more attractive valuation could alter the stock’s outlook. Until then, the cautious recommendation remains appropriate given the current data.

Conclusion

In conclusion, Alembic Ltd’s 'Sell' rating by MarketsMOJO, last updated on 07 July 2025, reflects a comprehensive analysis of the company’s present fundamentals, valuation, financial trends, and technical outlook as of 02 February 2026. While the company shows some positive earnings growth, the expensive valuation and bearish technical signals suggest limited upside and elevated risk. Investors should weigh these factors carefully when making portfolio decisions.

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