Borosil Renewables Ltd is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Borosil Renewables Ltd indicates a neutral stance on the stock, suggesting that investors should neither aggressively buy nor sell at this juncture. This rating reflects a balanced view of the company’s prospects, where certain strengths are offset by notable challenges. The rating was revised from 'Sell' to 'Hold' on 29 January 2026, accompanied by a Mojo Score increase from 47 to 52, signalling a modest improvement in the company’s overall profile.

Quality Assessment

As of 02 February 2026, Borosil Renewables exhibits an average quality grade. The company’s return on equity (ROE) stands at a modest 4.29%, indicating relatively low profitability generated from shareholders’ funds. This figure suggests that while the company is operationally stable, it is not delivering high returns on invested capital compared to industry standards. Despite this, the company has demonstrated healthy long-term growth, with operating profit expanding at an annualised rate of 596.76%, a remarkable achievement that underscores its capacity to scale earnings over time.

Valuation Considerations

The stock is currently classified as very expensive, trading at a price-to-book (P/B) ratio of 7.6. This elevated valuation implies that investors are paying a premium for the company’s shares relative to its book value. However, this premium is tempered by the company’s strong profit growth, which has surged by 257.8% over the past year. The price-to-earnings-to-growth (PEG) ratio of 0.2 further suggests that the stock’s price growth is not fully justified by its earnings growth, indicating potential overvaluation. Investors should weigh this expensive valuation against the company’s growth prospects and profitability metrics before making investment decisions.

Financial Trend and Performance

Financially, Borosil Renewables is rated outstanding, reflecting robust recent performance. The company declared exceptional results in December 2025, with operating profit growth of 2518.8% and a quarterly profit before depreciation, interest, and taxes (PBDIT) of ₹123.04 crores, the highest recorded to date. Additionally, the operating profit to interest coverage ratio reached a peak of 40.88 times, signalling strong ability to service debt obligations. The return on capital employed (ROCE) for the half-year period was 9.30%, the highest in recent history, further highlighting efficient capital utilisation. These financial trends demonstrate the company’s improving operational efficiency and profitability despite its modest ROE.

Technical Outlook

From a technical perspective, the stock currently holds a bearish grade. Price performance over recent periods has been weak, with the stock declining 6.62% over the past year and more pronounced drops over shorter intervals: -11.84% in one month and -24.62% over three months. The year-to-date return is also negative at -10.31%. This downward momentum suggests caution for short-term traders, as the stock has yet to establish a clear technical recovery. The slight positive change of 0.20% on 02 February 2026 indicates some stability, but the overall trend remains subdued.

Investor Ownership and Market Position

Despite its smallcap status and notable financial improvements, domestic mutual funds hold a relatively small stake of just 0.72% in Borosil Renewables. This limited institutional interest may reflect concerns about valuation or business fundamentals at current price levels. Mutual funds typically conduct thorough research and their restrained exposure could signal caution or a wait-and-watch approach. For investors, this highlights the importance of conducting independent due diligence before committing capital.

Summary of Key Metrics as of 02 February 2026

The stock’s Mojo Score of 52 aligns with the 'Hold' rating, reflecting a balanced mix of strengths and weaknesses. While the company’s financial trend is outstanding, its valuation remains very expensive and technical indicators are bearish. The average quality grade and low ROE temper enthusiasm, despite impressive profit growth. Stock returns have been negative over multiple time frames, underscoring the need for cautious optimism.

What the Hold Rating Means for Investors

For investors, the 'Hold' rating suggests maintaining current positions rather than initiating new buys or selling off holdings. It reflects a stock that is neither undervalued enough to warrant a buy nor overvalued enough to justify a sell. Investors should monitor the company’s financial performance and market conditions closely, particularly focusing on improvements in profitability metrics such as ROE and ROCE, as well as any shifts in valuation multiples. The bearish technical outlook advises caution for short-term trading, while the strong financial trend offers some confidence in the company’s operational health.

Outlook and Considerations

Borosil Renewables Ltd’s recent financial results demonstrate significant operational progress, especially in profit growth and interest coverage. However, the stock’s expensive valuation and subdued technical momentum suggest that upside potential may be limited in the near term. Investors should consider the company’s long-term growth prospects alongside its current market pricing. The modest institutional ownership also indicates that the stock has not yet attracted broad market confidence, which could impact liquidity and price stability.

In conclusion, the 'Hold' rating by MarketsMOJO as of 29 January 2026, supported by a Mojo Score of 52, reflects a cautious but balanced view of Borosil Renewables Ltd. The company’s outstanding financial trend is offset by valuation concerns and technical weakness, making it a stock for investors to watch carefully rather than actively trade or accumulate at this stage.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →