Current Rating Overview
MarketsMOJO currently assigns Balkrishna Industries Ltd a 'Sell' rating, reflecting a cautious stance on the stock. This rating was established on 02 December 2025, when the company’s Mojo Score improved from 28 to 42 points, moving the grade from 'Strong Sell' to 'Sell'. The current Mojo Score of 42 indicates that while some aspects of the company’s outlook have improved, significant concerns remain that warrant a conservative investment approach.
Understanding the Rating Parameters
The 'Sell' 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 for investors.
Quality Assessment
As of 17 February 2026, Balkrishna Industries Ltd holds a 'good' quality grade. This reflects the company’s solid operational foundation and product positioning within the Tyres & Rubber Products sector. However, the long-term growth trajectory remains modest, with operating profit growing at an annualised rate of just 4.27% over the past five years. This slow growth rate suggests limited expansion potential, which is a critical consideration for investors seeking capital appreciation.
Valuation Considerations
The valuation grade for Balkrishna Industries Ltd is classified as 'very expensive'. Despite a return on capital employed (ROCE) of 11.8%, the stock trades at a high enterprise value to capital employed ratio of 4.1. This elevated valuation implies that the market has priced in optimistic expectations, which may not be fully supported by the company’s current financial performance. Notably, the stock is trading at a discount relative to its peers’ historical averages, but this discount is insufficient to offset concerns about its stretched valuation.
Financial Trend Analysis
The financial trend for Balkrishna Industries Ltd is described as 'flat'. The latest data as of 17 February 2026 shows that the company’s profit after tax (PAT) for the nine months ended December 2025 stood at ₹943.64 crores, representing a decline of 26.65% compared to the previous period. This contraction in profitability is a significant factor weighing on the stock’s outlook. Additionally, the company’s results for the December 2025 quarter were largely stagnant, indicating challenges in driving growth or margin expansion in the near term.
Technical Outlook
From a technical perspective, the stock is rated as 'mildly bearish'. Recent price movements reflect this sentiment, with the stock declining by 0.78% on the latest trading day and showing a one-week loss of 5.90%. However, the stock has posted some positive returns over the medium term, including a 4.33% gain over one month and an 8.21% increase over three months. Despite these short-term gains, the overall technical trend remains cautious, especially given the stock’s underperformance relative to the broader market.
Performance Relative to Market
As of 17 February 2026, Balkrishna Industries Ltd has underperformed the broader market indices. Over the past year, the stock has delivered a negative return of 4.17%, while the BSE500 index has generated a robust 13.11% gain. This divergence highlights the challenges faced by the company in keeping pace with market growth. The stock’s subdued performance is compounded by declining profits, which have fallen by approximately 26% over the same period.
Implications for Investors
The 'Sell' rating suggests that investors should exercise caution with Balkrishna Industries Ltd at present. The combination of a very expensive valuation, flat financial trends, and a mildly bearish technical outlook indicates limited upside potential and elevated risk. Investors seeking exposure to the Tyres & Rubber Products sector may prefer to consider alternatives with stronger growth prospects or more attractive valuations.
That said, the company’s good quality grade and recent improvement in the Mojo Score from 'Strong Sell' to 'Sell' indicate that some stabilisation may be underway. Investors with a higher risk tolerance might monitor the stock for signs of a sustained turnaround in profitability and valuation metrics before considering entry.
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Summary of Key Metrics as of 17 February 2026
Balkrishna Industries Ltd’s stock returns over various time frames illustrate a mixed picture. While the year-to-date return stands at a positive 10.13%, the one-year return remains negative at 4.17%. Medium-term returns show modest gains, with 6.52% over six months and 8.21% over three months. These figures suggest some recent recovery, but the longer-term trend remains subdued.
The company’s operating profit growth rate of 4.27% annually over five years is modest, signalling limited expansion in core operations. The flat financial trend and a significant decline in PAT over the last nine months further underscore the challenges in profitability.
Valuation remains a critical concern, with the stock’s enterprise value to capital employed ratio at 4.1, indicating a premium pricing relative to the capital base. This is despite the stock trading at a discount compared to peers’ historical valuations, reflecting market caution about the company’s growth prospects.
Sector and Market Context
Balkrishna Industries Ltd operates in the Tyres & Rubber Products sector, a space that has seen varied performance across companies depending on raw material costs, demand cycles, and global supply chain factors. The company’s midcap status places it in a competitive position, but also exposes it to volatility relative to larger, more diversified peers.
Given the broader market’s positive performance, with the BSE500 index up 13.11% over the past year, Balkrishna Industries Ltd’s underperformance highlights sector-specific or company-specific challenges that investors should carefully consider.
Conclusion
In conclusion, Balkrishna Industries Ltd’s 'Sell' rating by MarketsMOJO reflects a balanced assessment of its current financial health, valuation, and market performance as of 17 February 2026. While the company maintains good quality fundamentals, its expensive valuation, flat financial trend, and cautious technical outlook suggest limited near-term upside. Investors should weigh these factors carefully and monitor future developments before making investment decisions.
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