Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating 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 current market environment.
Quality Assessment
As of 13 February 2026, Alembic Ltd holds an average quality grade. This reflects a moderate level of operational efficiency and business stability. While the company maintains a presence in the realty sector, its recent quarterly performance has shown signs of strain. The latest quarterly profit after tax (PAT) stood at ₹60.13 crores, marking an 8.0% decline compared to previous quarters. Earnings per share (EPS) have also dipped to a low of ₹2.34, signalling challenges in profitability. These factors suggest that the company’s core business quality is currently under pressure, which weighs on investor confidence.
Valuation Perspective
Valuation is a critical consideration for investors, and Alembic Ltd is currently rated as very expensive. The stock trades at a price-to-book value of 1, which is relatively high given its return on equity (ROE) of 12.8%. This valuation level implies that the market has priced in optimistic expectations for future growth, which may not be fully supported by the company’s recent financial trends. The price-earnings-to-growth (PEG) ratio stands at 1.8, indicating that earnings growth is not sufficiently robust to justify the premium valuation. Investors should be cautious as the stock’s current price may not offer an adequate margin of safety.
Financial Trend Analysis
The financial trend for Alembic Ltd is flat, reflecting a lack of significant growth momentum. Despite a modest 4.4% increase in profits over the past year, the stock has delivered negative returns of -8.51% over the same period. This underperformance extends to shorter time frames as well, with the stock declining by 6.08% year-to-date and nearly 10% over six months. Such trends highlight the company’s struggle to generate consistent value for shareholders in the current market cycle.
Technical Outlook
From a technical standpoint, Alembic Ltd exhibits a mildly bearish grade. The stock’s price has been trending downward, with a one-day decline of 3.62% and a one-month drop of 3.19%. Over three months, the stock has fallen by 5.99%, signalling weakening investor sentiment. This technical weakness suggests that the stock may face continued selling pressure unless there is a significant change in fundamentals or market conditions.
Additional Market Insights
Despite Alembic Ltd’s small-cap status within the realty sector, domestic mutual funds currently hold no stake in the company. This absence of institutional interest may reflect concerns about the stock’s valuation or business prospects. Typically, mutual funds conduct thorough on-the-ground research, and their lack of participation could be interpreted as a cautionary signal for retail investors.
Furthermore, the stock has underperformed the BSE500 index over the past three years, one year, and three months, reinforcing the view that Alembic Ltd has lagged behind broader market benchmarks. This relative underperformance adds to the rationale behind the 'Sell' rating, as investors may find better opportunities elsewhere in the market.
Here's How Alembic Ltd Looks Today
As of 13 February 2026, the stock’s fundamentals and market performance suggest a challenging environment for Alembic Ltd. The combination of average quality, very expensive valuation, flat financial trends, and mildly bearish technicals culminates in a cautious investment outlook. For investors, this means that Alembic Ltd currently does not present a compelling risk-reward proposition, and maintaining or increasing exposure may not be advisable.
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Investor Considerations
Investors should weigh the current 'Sell' rating carefully in the context of their portfolio strategy and risk tolerance. The stock’s recent performance and valuation metrics suggest limited upside potential in the near term. Those holding Alembic Ltd shares may consider trimming their positions to manage downside risk, while prospective buyers might prefer to wait for more favourable valuations or signs of operational improvement.
It is also important to monitor any changes in the company’s quarterly results, sector dynamics, and broader market conditions that could influence Alembic Ltd’s outlook. Given the flat financial trend and technical weakness, a turnaround would likely require a meaningful improvement in earnings growth and investor sentiment.
Summary
In summary, Alembic Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 07 July 2025, reflects a comprehensive assessment of its average quality, very expensive valuation, flat financial trend, and mildly bearish technical outlook. As of 13 February 2026, the stock’s underperformance relative to market benchmarks and lack of institutional interest further support a cautious stance. Investors should carefully consider these factors when making decisions about Alembic Ltd in their portfolios.
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