Borosil Renewables Ltd Downgraded to Sell Amid Technical Weakness and Valuation Concerns

Technical Analysis Triggers Downgrade

The primary catalyst for the downgrade is the marked deterioration in Borosil Renewables’ technical profile. The technical trend has shifted from sideways to bearish, signalling increased selling pressure and weakening momentum. Key technical indicators paint a cautious picture: the Moving Average Convergence Divergence (MACD) is bearish on a weekly basis and mildly bearish monthly, while Bollinger Bands confirm bearish trends both weekly and monthly. Daily moving averages also reflect a bearish stance, reinforcing the negative momentum.

Other technical tools such as the Know Sure Thing (KST) indicator show a mixed signal with weekly bearishness but monthly bullishness, while the Dow Theory and On-Balance Volume (OBV) indicators suggest no clear weekly trend but mildly bearish monthly trends. The Relative Strength Index (RSI) remains neutral with no significant signals on weekly or monthly charts. Collectively, these technical signals have contributed decisively to the downgrade, indicating that the stock may face further downside pressure in the near term.

Valuation Concerns Amid Expensive Metrics

Despite the technical weakness, Borosil Renewables’ valuation remains a significant concern. The company trades at a price-to-book (P/B) ratio of 8, which is considered very expensive relative to its sector peers and historical averages. This elevated valuation is not fully supported by its return on equity (ROE), which is a modest 4.29%, indicating low profitability per unit of shareholder funds. The average ROE of 4.29% contrasts sharply with the high valuation, suggesting that investors are paying a premium for growth expectations rather than current profitability.

Moreover, the stock’s price-to-earnings growth (PEG) ratio stands at 1.2, reflecting a moderate premium for its earnings growth prospects. While the company’s profits have surged by 147.2% over the past year, the stock price has declined by 6.62%, underperforming the broader BSE500 index which gained 8.01% over the same period. This disconnect between earnings growth and share price performance raises questions about market confidence in the sustainability of the company’s growth trajectory.

Financial Trend: Strong Operational Growth but Weak Profitability

Borosil Renewables has demonstrated very positive financial performance in the recent quarter (Q2 FY25-26), with operating profit growth at an impressive annual rate of 104.92%. The company’s operating profit surged by 248.44%, while profit after tax (PAT) for the quarter reached ₹31.92 crores, reflecting a staggering growth of 427.4%. Return on capital employed (ROCE) also improved, reaching a high of 9.30%, and the operating profit to interest coverage ratio stood at a robust 32.86 times, indicating strong operational efficiency and debt servicing capability.

Despite these encouraging operational metrics, the company’s management efficiency remains a concern. The low ROE of 4.29% highlights suboptimal utilisation of shareholders’ equity to generate profits. This inefficiency is a key factor weighing on investor sentiment and contributes to the cautious outlook reflected in the downgrade.

Additionally, Borosil Renewables has consistently underperformed the benchmark indices over the last three years. The stock’s one-year return of -6.62% contrasts with the Sensex’s 8.01% gain, and it has lagged behind the BSE500 index in each of the past three annual periods. This persistent underperformance raises questions about the company’s ability to deliver sustained shareholder value despite strong top-line growth.

Market Position and Sector Context

With a market capitalisation of ₹7,148 crores, Borosil Renewables is the second-largest company in the industrial products sector, trailing only Asahi India Glass. It accounts for 18.32% of the sector’s market cap and contributes 16.20% of the industry’s annual sales, which total ₹1,460.49 crores. This significant market presence underscores the company’s importance within the sector, but also highlights the competitive pressures it faces from larger and more efficient peers.

The stock’s 52-week price range of ₹441.70 to ₹720.85 reflects considerable volatility, with the current price at ₹509.85 as of the latest trading session. Today’s trading saw a high of ₹511.45 and a low of ₹490.50, with a day change of +2.65%, indicating some short-term buying interest despite the overall bearish technical outlook.

Quality Assessment and Mojo Grade

Borosil Renewables currently holds a Mojo Grade of Sell with a score of 41.0, downgraded from Hold as of 21 January 2026. The Market Cap Grade is 3, reflecting its sizeable but not dominant position within the sector. The downgrade reflects a comprehensive assessment across four key parameters: quality, valuation, financial trend, and technicals.

Quality-wise, the company’s low ROE and management efficiency issues detract from its investment appeal. While operational metrics such as ROCE and interest coverage are healthy, the inability to translate these into higher returns on equity signals structural challenges. Valuation remains stretched, with the stock trading at a premium that is not justified by current profitability levels.

Financial trends show strong growth in operating profit and PAT, but inconsistent stock price performance and underperformance relative to benchmarks temper enthusiasm. Technical indicators have deteriorated sharply, with multiple signals pointing to bearish momentum and potential further downside risk.

Investor Takeaway

Investors should approach Borosil Renewables with caution given the recent downgrade and mixed signals from fundamental and technical analyses. While the company’s operational growth and market position are commendable, valuation concerns and weak management efficiency undermine the investment case. The bearish technical outlook suggests limited near-term upside, and the stock’s historical underperformance relative to benchmarks warrants careful consideration.

For those seeking exposure to the industrial products sector, it may be prudent to explore alternative stocks with stronger quality metrics, more attractive valuations, and healthier technical trends. Borosil Renewables’ current rating reflects these risks and the need for investors to reassess their portfolio allocations accordingly.

Summary of Key Metrics:

• Mojo Score: 41.0 (Sell, downgraded from Hold)


• Price-to-Book Value: 8 (Very Expensive)


• Return on Equity (ROE): 4.29% (Low profitability)


• Operating Profit Growth (Annual): 104.92%


• Profit After Tax Growth (Quarterly): 427.4%


• ROCE (Half Year): 9.30%


• Technical Trend: Bearish (weekly and monthly)


• Stock Price (Latest): ₹509.85 (52-week range ₹441.70 - ₹720.85)


• Market Capitalisation: ₹7,148 crores

Given these factors, the downgrade to Sell is a reflection of the evolving risk profile of Borosil Renewables Ltd, signalling investors to exercise prudence and consider portfolio diversification strategies.

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