Financial Trend: From Positive to Flat Performance
The primary catalyst for the downgrade lies in Ashirwad Capital’s financial trajectory. The company reported flat financial performance for the quarter ended December 2025, with its financial trend score plunging from a robust 9 to a mere 3 over the past three months. Despite a modest increase in profit after tax (PAT) over the last six months, reaching ₹0.93 crore, this growth has failed to translate into sustained momentum.
Long-term fundamentals remain weak, with an average Return on Equity (ROE) of just 6.44%, underscoring limited profitability relative to shareholder equity. The latest quarter’s flat results reinforce concerns about the company’s ability to generate consistent earnings growth in a competitive NBFC landscape.
Moreover, Ashirwad Capital’s stock price has underperformed significantly against benchmark indices. Over the past year, the stock has declined by 42.74%, starkly contrasting with the Sensex’s 9.66% gain. Year-to-date, the stock is down 10.07%, while the Sensex has only fallen 2.28%. This underperformance extends to the three-year horizon, where Ashirwad’s 16.08% return trails the Sensex’s 35.81% advance.
Our latest monthly pick, this Large Cap from Aluminium & Aluminium Products, is outperforming the market! See the analysis that helped our Investment Committee select this winner.
- - Market-beating performance
- - Committee-backed winner
- - Aluminium & Aluminium Products standout
Valuation: Attractive Yet Reflective of Risks
Despite the negative outlook, Ashirwad Capital’s valuation metrics present a somewhat attractive picture. The stock trades at ₹2.68, close to its 52-week low of ₹2.40, and significantly below its 52-week high of ₹4.92. Its Price to Book Value ratio stands at a modest 1.2, indicating a discount relative to peers in the NBFC sector.
However, this valuation attractiveness is tempered by the company’s elevated Price/Earnings to Growth (PEG) ratio of 3.8, suggesting that earnings growth expectations may not justify the current price. The stock’s weak long-term returns and flat recent financial performance raise questions about the sustainability of any valuation premium.
Technical Analysis: Shift to Bearish Sentiment
Technical indicators have also deteriorated, contributing to the downgrade. The technical trend has shifted from mildly bearish to outright bearish, with key momentum and trend-following tools signalling caution. The Moving Average Convergence Divergence (MACD) is bearish on both weekly and monthly charts, while daily moving averages confirm a bearish stance.
The Relative Strength Index (RSI) presents a mixed picture, showing no clear signal on the weekly timeframe but a bullish indication monthly. Bollinger Bands remain mildly bearish across weekly and monthly periods, and the KST oscillator is mildly bullish weekly but bearish monthly. Dow Theory analysis reveals no definitive trend on either timeframe, adding to the uncertainty.
Overall, the technical landscape suggests limited upside potential in the near term, reinforcing the Strong Sell recommendation.
Quality Assessment: Weak Fundamentals and Shareholder Structure
Ashirwad Capital’s quality grade remains poor, reflected in its Mojo Score of 26.0 and a downgrade from Sell to Strong Sell. The company’s weak return on equity and flat financial results highlight fundamental challenges. Promoters remain the majority shareholders, but this has not translated into improved operational or financial performance.
The company’s underperformance relative to the BSE500 index over multiple timeframes further emphasises its struggles to create shareholder value. While the stock has generated a 68.10% return over five years, this pales in comparison to the Sensex’s 59.83% over the same period, and the 10-year returns of 112.15% lag the Sensex’s 259.08% by a wide margin.
Ashirwad Capital Ltd or something better? Our SwitchER feature analyzes this micro-cap Non Banking Financial Company (NBFC) stock and recommends superior alternatives based on fundamentals, momentum, and value!
- - SwitchER analysis complete
- - Superior alternatives found
- - Multi-parameter evaluation
Implications for Investors
The downgrade to Strong Sell signals heightened risk for investors considering Ashirwad Capital Ltd. The combination of flat financial performance, deteriorating technical indicators, and weak fundamental quality suggests limited near-term upside and potential for further downside.
Investors should weigh the company’s attractive valuation against its poor earnings growth prospects and technical weakness. The stock’s significant underperformance relative to benchmark indices over the past year and longer term underscores the challenges facing the company in regaining investor confidence.
Given these factors, a cautious approach is warranted, with consideration for alternative NBFC stocks that demonstrate stronger financial trends, better technical setups, and superior quality metrics.
Summary of Key Metrics
• Mojo Score: 26.0 (Strong Sell, downgraded from Sell)
• Financial Trend Score: 3 (down from 9)
• ROE: 6.44% average, 5.3% latest
• Price to Book Value: 1.2
• PEG Ratio: 3.8
• Stock Price: ₹2.68 (52-week range ₹2.40 - ₹4.92)
• 1-Year Return: -42.74% vs Sensex +9.66%
• Technical Trend: Bearish (MACD, Moving Averages)
• Majority Shareholders: Promoters
In conclusion, Ashirwad Capital Ltd’s recent downgrade reflects a comprehensive reassessment of its financial health, valuation, technical outlook, and overall quality. Investors should remain vigilant and consider the broader market context before making investment decisions involving this micro-cap NBFC.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
