Centrum Capital Ltd is Rated Strong Sell

Understanding the Current Rating

The Strong Sell rating assigned to Centrum Capital Ltd indicates a cautious stance for investors, signalling significant concerns across multiple evaluation parameters. This rating was established on 24 Nov 2025 following a notable decline in the company’s Mojo Score from 37 to 16, reflecting deteriorating fundamentals and market sentiment. Investors should interpret this rating as a recommendation to avoid or exit positions in the stock, given the prevailing risks and weak outlook.

How the Stock Looks Today: Current Fundamentals and Performance

As of 07 January 2026, Centrum Capital Ltd continues to face challenges across its financial and market metrics. The company operates within the Non Banking Financial Company (NBFC) sector and is classified as a small-cap stock. Its current Mojo Score stands at 16.0, firmly placing it in the Strong Sell category, a step down from its previous Sell rating.

The stock’s recent price movement has been subdued, with a day change of -0.10% and a one-month decline of -1.32%. Over the past three months, the stock has fallen by -14.26%, and over six months by -16.76%. The year-to-date return is marginally negative at -0.14%, while the one-year return stands at -9.25%, underperforming broader market benchmarks such as the BSE500.

Quality Assessment

Centrum Capital’s quality grade is currently rated below average. The company’s long-term fundamental strength is weak, with an average Return on Equity (ROE) of 0% signalling a lack of profitability and value creation for shareholders. The latest quarterly results, as of September 2025, reveal a concerning trend: the Profit After Tax (PAT) stood at a loss of ₹40.65 crores, representing a 47.5% decline compared to the previous four-quarter average. Net sales also fell by 9.2% to ₹822.94 crores, while Profit Before Depreciation, Interest and Taxes (PBDIT) hit a low of ₹175.64 crores. These figures underscore the company’s struggle to generate consistent earnings and maintain operational efficiency.

Valuation Perspective

The valuation grade for Centrum Capital is very expensive, which is a significant concern given the company’s weak financial performance. The stock trades at a price-to-book value of 3, a premium relative to its peers’ historical valuations. This elevated valuation is difficult to justify in light of the company’s negative ROE of -28.2%, indicating that investors are paying a high price for a stock that is currently destroying shareholder value. Despite this, the company’s profits have risen by 9.6% over the past year, a modest positive in an otherwise challenging environment.

Financial Trend and Stability

The financial trend for Centrum Capital is flat, reflecting stagnation rather than growth. The company’s recent quarterly results and annual performance indicate no significant improvement or deterioration, but the overall trajectory remains weak. A notable risk factor is the high level of promoter share pledging, which currently stands at 49.9%. This is an increase of 2.99% over the last quarter and poses additional downward pressure on the stock price, especially in volatile or falling markets. High pledged shares can lead to forced selling, exacerbating price declines and increasing investor risk.

Technical Outlook

From a technical standpoint, Centrum Capital is rated bearish. The stock has consistently underperformed the benchmark indices over the last three years, failing to generate positive returns relative to the broader market. This persistent underperformance is reflected in the negative returns over multiple time frames, including a -8.79% return in the last year. The bearish technical grade suggests that the stock’s price momentum remains weak, with limited signs of a near-term reversal or recovery.

Implications for Investors

For investors, the Strong Sell rating on Centrum Capital Ltd serves as a clear warning signal. The combination of weak quality metrics, expensive valuation, flat financial trends, and bearish technical indicators suggests that the stock carries significant downside risk. Investors should carefully consider these factors before initiating or maintaining positions in the stock. The current market environment and company-specific challenges imply that capital preservation should be a priority, and alternative investment opportunities with stronger fundamentals and valuations may be more favourable.

Sector and Market Context

Operating within the NBFC sector, Centrum Capital faces sector-specific headwinds including tightening credit conditions, regulatory scrutiny, and competitive pressures. The company’s small-cap status further exposes it to liquidity risks and market volatility. Compared to its peers, Centrum Capital’s valuation premium is not supported by commensurate earnings growth or return metrics, making it less attractive in the current market landscape.

Summary of Key Metrics as of 07 January 2026

To summarise, the stock’s key metrics paint a challenging picture:

• Mojo Score: 16.0 (Strong Sell)


• Quality Grade: Below Average


• Valuation Grade: Very Expensive (P/B of 3)


• Financial Grade: Flat


• Technical Grade: Bearish


• Promoter Share Pledging: 49.9%, increased by 2.99% last quarter


• One-year stock return: -9.25%


• Profit After Tax (latest quarter): ₹-40.65 crores, down 47.5%


• Net Sales (latest quarter): ₹822.94 crores, down 9.2%

These figures collectively justify the Strong Sell rating and highlight the risks associated with the stock at present.

Conclusion

Centrum Capital Ltd’s current Strong Sell rating by MarketsMOJO reflects a comprehensive assessment of its weak fundamentals, stretched valuation, stagnant financial trends, and negative technical outlook. Investors should approach the stock with caution, recognising the elevated risks and limited upside potential. Monitoring the company’s future quarterly results and sector developments will be crucial for any reassessment of its investment appeal.

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