Current Rating and Its Significance
MarketsMOJO currently assigns Baroda Extrusion Ltd a 'Sell' rating, reflecting a cautious stance on the stock. This rating suggests that investors should consider reducing their exposure or avoiding new purchases at present, based on a comprehensive evaluation of the company's quality, valuation, financial health, and technical indicators. The rating was last revised on 12 Nov 2025, when the Mojo Score improved from 23 to 41, moving the grade from 'Strong Sell' to 'Sell'. Despite this improvement, the overall outlook remains negative, signalling persistent challenges.
Here’s How Baroda Extrusion Ltd Looks Today
As of 05 January 2026, Baroda Extrusion Ltd is classified as a microcap company operating within the Industrial Products sector. The stock has demonstrated notable price momentum recently, with a one-month gain of 57.73% and a year-to-date return of 28.03%. Over the past year, the stock has delivered a 21.49% return, reflecting some positive market sentiment. However, these returns must be weighed against the underlying fundamentals and valuation metrics to assess the sustainability of this performance.
Quality Assessment
The company's quality grade is assessed as average. This is primarily due to its modest profitability and operational efficiency. Currently, Baroda Extrusion Ltd reports a Return on Capital Employed (ROCE) of 5.45%, indicating limited profitability generated from the total capital invested in the business. Similarly, the Return on Equity (ROE) stands at 6.10%, which is relatively low and suggests that shareholder funds are not being utilised optimally to generate earnings. These figures highlight concerns about management efficiency and the company's ability to deliver strong returns on invested capital.
Valuation Perspective
From a valuation standpoint, the stock is considered very expensive. The Enterprise Value to Capital Employed ratio is 8.6, which is high relative to typical industry benchmarks. This elevated valuation implies that investors are paying a premium for the company's capital base, which may not be justified given the current profitability levels. Despite the high valuation, the company’s profits have surged by an impressive 491.1% over the past year, resulting in a low Price/Earnings to Growth (PEG) ratio of 0.1. This suggests that while the stock is expensive on traditional metrics, the rapid profit growth could offer some justification for the premium, though investors should remain cautious.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Debt Profile
The financial trend for Baroda Extrusion Ltd is currently positive, reflecting recent improvements in profitability and operational metrics. However, the company faces significant challenges in servicing its debt. The Debt to EBITDA ratio is alarmingly high at 25.33 times, indicating a heavy debt burden relative to earnings before interest, taxes, depreciation, and amortisation. This level of leverage raises concerns about the company's financial flexibility and its ability to meet debt obligations without compromising operational stability. Investors should be mindful of this risk when considering the stock.
Technical Outlook
Technically, the stock is rated as mildly bearish. Despite recent strong price gains, the technical indicators suggest some caution, as the momentum may not be fully supported by underlying strength. The stock’s day change of +5.84% and one-week gain of 6.33% show short-term positive movement, but the mildly bearish technical grade advises investors to watch for potential resistance or volatility in the near term.
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What This Rating Means for Investors
For investors, the 'Sell' rating on Baroda Extrusion Ltd signals caution. While the stock has shown impressive price appreciation and profit growth recently, the underlying fundamentals and valuation metrics suggest that the company faces significant challenges. The average quality grade, high valuation, heavy debt load, and mildly bearish technical outlook collectively indicate that the stock may be vulnerable to downside risks. Investors should carefully consider these factors and their own risk tolerance before making investment decisions.
It is important to note that the rating and analysis are based on the most recent data as of 05 January 2026, ensuring that investors have the latest insights into the company’s financial health and market position. The 'Sell' rating does not imply an immediate decline but rather advises prudence given the current risk-reward profile.
Summary
Baroda Extrusion Ltd’s current 'Sell' rating by MarketsMOJO reflects a balanced view of its recent performance and ongoing challenges. The company’s average quality, very expensive valuation, positive yet leveraged financial trend, and mildly bearish technical signals combine to form a cautious outlook. While the stock’s recent returns have been strong, the elevated debt levels and modest profitability metrics warrant careful consideration. Investors should monitor developments closely and weigh these factors against their portfolio objectives.
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