Borosil Renewables Ltd is Rated Hold by MarketsMOJO

Understanding the Current Rating

The 'Hold' rating assigned to Borosil Renewables Ltd indicates a cautious stance for investors. It suggests that while the stock may not be an immediate buy opportunity, it is not a sell candidate either. Investors are advised to maintain their existing positions and monitor the company’s performance closely. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals.

Quality Assessment

As of 25 December 2025, Borosil Renewables exhibits an average quality grade. The company’s management efficiency, as measured by Return on Equity (ROE), remains modest at 4.29%. This low ROE indicates that the company generates limited profitability relative to shareholders’ equity, which is a concern for long-term value creation. Despite this, the company has demonstrated strong operational growth, with operating profit increasing at an annual rate of 104.92%, signalling robust business expansion and operational leverage.

Valuation Considerations

The stock is currently rated as very expensive based on valuation metrics. Trading at a Price to Book (P/B) ratio of 8.5, Borosil Renewables is priced significantly above its book value, reflecting high market expectations. While the stock trades at a discount relative to its peers’ historical valuations, this premium valuation demands sustained financial performance to justify the price. Investors should be mindful that the company’s PEG ratio stands at 1.3, indicating that the stock’s price growth is somewhat aligned with its earnings growth, but leaves limited margin for valuation expansion.

Financial Trend and Profitability

Financially, Borosil Renewables shows a very positive trend. The latest quarterly results as of 25 December 2025 reveal a remarkable 248.44% growth in operating profit. Profit After Tax (PAT) for the quarter stood at ₹31.92 crores, reflecting an extraordinary growth rate of 427.4%. The company’s Return on Capital Employed (ROCE) is at a healthy 9.30%, and its operating profit to interest coverage ratio is an impressive 32.86 times, indicating strong earnings relative to debt servicing costs. These figures highlight the company’s improving profitability and operational efficiency despite its modest ROE.

Technical Analysis

From a technical perspective, Borosil Renewables is mildly bullish. The stock has experienced mixed returns over various time frames as of 25 December 2025: a slight decline of 0.64% in the last day, a 2.29% gain over the past week, but a 7.22% drop in the last month. Over six months, the stock has gained 1.93%, while year-to-date returns are negative at -2.03%. The one-year return stands at -5.80%, underperforming the broader BSE500 index over the same period. This mixed technical performance suggests some near-term volatility but a potential for recovery if positive financial trends continue.

Sector Position and Market Capitalisation

Borosil Renewables holds a significant position within the Industrial Products sector. With a market capitalisation of approximately ₹7,633 crores, it is the second-largest company in its sector, representing 18.58% of the sector’s total market value. Its annual sales of ₹1,460.49 crores account for 15.48% of the industry’s revenue, underscoring its importance as a key player. Despite this, the company’s stock performance has lagged behind sector peers, reflecting challenges in translating operational growth into shareholder returns.

What This Rating Means for Investors

The 'Hold' rating on Borosil Renewables Ltd advises investors to maintain their current holdings without initiating new positions or selling existing ones. The company’s strong financial trends and operational growth are encouraging, but the expensive valuation and modest profitability metrics temper enthusiasm. Investors should watch for sustained improvements in return ratios and stock price performance before considering an upgrade to a more bullish stance.

Given the stock’s mixed technical signals and valuation concerns, cautious investors may prefer to wait for clearer signs of value realisation. Meanwhile, those already invested can monitor quarterly earnings and sector developments closely to reassess their positions as new data emerges.

Summary

In summary, Borosil Renewables Ltd’s current 'Hold' rating reflects a balanced view of its strengths and challenges. The company’s very positive financial trend and operational growth contrast with average quality metrics and a very expensive valuation. Technical indicators suggest mild bullishness but also highlight recent volatility. This nuanced outlook encourages investors to stay informed and exercise prudence in portfolio decisions.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →