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 is based on a comprehensive assessment of the company’s quality, valuation, financial trend, and technical outlook. It suggests that the stock currently exhibits weak fundamentals and unfavourable market signals, advising investors to consider avoiding or exiting positions in the stock.
Quality Assessment
As of 20 February 2026, Centrum Capital Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with an average Return on Equity (ROE) of 0%. More recently, the ROE has deteriorated to -28.2%, reflecting losses rather than profitability. This negative profitability trend is further underscored by the company’s quarterly results for December 2025, which showed a net loss after tax (PAT) of ₹92.26 crores, a decline of 189.8% compared to the previous four-quarter average. Earnings per share (EPS) also hit a low of ₹-2.12, signalling ongoing operational challenges. Such financial weakness diminishes investor confidence and weighs heavily on the quality score.
Valuation Considerations
Valuation metrics as of today indicate that Centrum Capital Ltd is very expensive relative to its fundamentals and peers. The stock trades at a price-to-book (P/B) ratio of 2.5, which is high given the company’s negative ROE and deteriorating earnings. This premium valuation is not supported by earnings growth or profitability, making the stock unattractive from a value perspective. Over the past year, the stock has generated a negative return of 13.54%, while profits have declined by 1.2%, further emphasising the disconnect between price and performance.
Financial Trend Analysis
The financial trend for Centrum Capital Ltd is negative. The company’s profit before tax excluding other income (PBT less OI) for the December 2025 quarter stood at ₹-219.26 crores, down 19.2% from the previous four-quarter average. This sustained downward trajectory in earnings and profitability metrics highlights ongoing operational and market challenges. Additionally, the stock’s returns over various time frames are disappointing: a 1-day decline of 0.29%, a 1-week drop of 5.96%, and a 3-month fall of 25.64%. The 6-month and year-to-date returns are also negative at -35.91% and -15.95% respectively, confirming a persistent downtrend.
Technical Outlook
Technically, Centrum Capital Ltd is rated bearish. The stock’s price action and momentum indicators suggest continued weakness. The presence of 47.24% promoter share pledge adds further risk, as high pledged shares can exert additional downward pressure on the stock price during market declines. The stock has underperformed the BSE500 index over the last three years, one year, and three months, reinforcing the negative technical sentiment. This bearish technical grade aligns with the overall Strong Sell recommendation.
Investor Implications
For investors, the Strong Sell rating on Centrum Capital Ltd serves as a warning signal. The combination of weak quality, expensive valuation, deteriorating financial trends, and bearish technicals suggests that the stock is currently a high-risk investment. Investors should carefully evaluate their exposure and consider alternative opportunities with stronger fundamentals and more favourable valuations. The rating reflects a comprehensive view that the stock is unlikely to deliver positive returns in the near term and may continue to face downward pressure.
Here’s How the Stock Looks TODAY
As of 20 February 2026, Centrum Capital Ltd remains a microcap player in the Non-Banking Financial Company (NBFC) sector, with a Mojo Score of 7.0 and a Mojo Grade of Strong Sell. The downgrade from Sell to Strong Sell on 24 November 2025 was driven by a 30-point drop in the Mojo Score, signalling a marked deterioration in the company’s outlook. Despite this, the current data confirms that the challenges persist, with no signs of recovery in key financial metrics or market sentiment.
The stock’s recent performance metrics paint a bleak picture. Over the past year, the stock has declined by 12.68%, with sharper losses in shorter time frames. The company’s financial results continue to disappoint, with losses widening and profitability metrics weakening. The high promoter share pledge ratio remains a concern, as it increases the risk of forced selling in volatile markets.
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Sector and Market Context
Within the NBFC sector, Centrum Capital Ltd’s performance is notably weaker than many peers. The sector has faced headwinds from tightening credit conditions and regulatory scrutiny, but several companies have managed to maintain stable earnings and valuations. Centrum’s below-average quality and negative financial trends place it at a disadvantage relative to sector benchmarks. Investors seeking exposure to NBFCs may find more compelling opportunities elsewhere, particularly among companies with stronger balance sheets and more attractive valuations.
Summary
In summary, Centrum Capital Ltd’s Strong Sell rating reflects a comprehensive assessment of its current challenges. The company’s below-average quality, very expensive valuation, negative financial trend, and bearish technical outlook combine to create a high-risk profile. As of 20 February 2026, the stock continues to underperform, with deteriorating profitability and significant market pressures. Investors should approach this stock with caution and consider reallocating capital to more robust opportunities within the financial sector or beyond.
Looking Ahead
While the current outlook is unfavourable, investors should monitor key indicators such as improvements in profitability, reduction in promoter share pledges, and a stabilisation of valuation multiples. Any positive shifts in these areas could warrant a reassessment of the stock’s rating. Until then, the Strong Sell recommendation remains a prudent guide for managing risk in portfolios.
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