Understanding the Current Rating
The 'Strong Sell' rating assigned to Coffee Day Enterprises Ltd indicates a cautious stance for investors, signalling significant concerns across multiple key parameters. This rating is derived from a detailed analysis of four critical factors: Quality, Valuation, Financial Trend, and Technicals. Each of these elements contributes to the overall assessment of the stock’s investment potential and risk profile.
Quality Assessment
As of 24 December 2025, Coffee Day Enterprises Ltd exhibits below-average quality metrics. The company’s long-term fundamental strength is weak, with a compounded annual growth rate (CAGR) in net sales of -3.32% over the past five years. This negative growth trend highlights challenges in expanding its revenue base. Profitability remains subdued, with an average Return on Equity (ROE) of just 1.11%, indicating limited efficiency in generating returns from shareholders’ funds.
Moreover, the company’s ability to service its debt is concerning. The average EBIT to interest ratio stands at -0.85, signalling that earnings before interest and tax are insufficient to cover interest expenses. This weak coverage ratio raises questions about financial stability and the risk of increased borrowing costs or refinancing difficulties.
Valuation Perspective
Despite the weak quality indicators, Coffee Day Enterprises Ltd’s valuation is currently very attractive. The stock trades at levels that may appeal to value investors seeking potential turnaround opportunities or undervalued assets in the leisure services sector. However, attractive valuation alone does not offset the risks posed by deteriorating fundamentals and financial strain.
Register here to know the latest call on Coffee Day Enterprises Ltd
- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend Analysis
The financial trend for Coffee Day Enterprises Ltd remains negative as of 24 December 2025. The company has reported losses for five consecutive quarters, reflecting ongoing operational challenges. The quarterly profit after tax (PAT) has declined sharply, with the latest figure at a loss of ₹12.46 crores, representing a fall of 278.7% compared to previous periods.
Interest expenses have surged, with a 42.92% increase over the last nine months, reaching ₹91.84 crores. This rising interest burden exacerbates the company’s financial stress and limits cash flow available for growth or debt reduction. Additionally, promoter share pledging stands at 26.63%, which can exert downward pressure on the stock price in volatile markets, as pledged shares may be liquidated to meet margin calls.
Technical Outlook
From a technical standpoint, the stock exhibits mildly bearish signals. Recent price movements show a 0.45% decline on the latest trading day, with a one-month return of -0.67% and a three-month return of -19.85%. Despite a strong year-to-date gain of 56.45% and a one-year return of 48.66%, the short-term technical indicators suggest caution. The stock’s momentum appears to be weakening, which may reflect investor uncertainty amid the company’s fundamental challenges.
What This Rating Means for Investors
The 'Strong Sell' rating from MarketsMOJO serves as a clear warning to investors about the elevated risks associated with Coffee Day Enterprises Ltd at this time. While the stock’s valuation may seem appealing, the combination of weak quality metrics, deteriorating financial trends, and bearish technical signals suggests that the company faces significant headwinds. Investors should carefully consider these factors before initiating or maintaining positions in the stock.
For those holding shares, the rating advises prudence and possibly re-evaluating exposure, especially given the high promoter share pledging and ongoing losses. Prospective investors might prefer to wait for signs of financial recovery and improved operational performance before considering entry.
Only 1% make it here. This Large Cap from the Gems, Jewellery And Watches sector passed our rigorous filters with flying colors. Be among the first few to spot this gem!
- - Highest rated stock selection
- - Multi-parameter screening cleared
- - Large Cap quality pick
Summary of Key Metrics as of 24 December 2025
Coffee Day Enterprises Ltd’s current Mojo Score stands at 23.0, firmly placing it in the 'Strong Sell' category. This score reflects a 15-point decline from the previous 38 recorded before 02 Dec 2025. The company’s market capitalisation remains in the microcap range within the leisure services sector, which often entails higher volatility and risk.
Stock returns over various periods show mixed signals: a modest 5.09% gain over the past week contrasts with a nearly 20% decline over three months. The year-to-date and one-year returns remain positive at 56.45% and 48.66%, respectively, but these gains may be overshadowed by the company’s fundamental weaknesses and financial stress.
Investors should weigh these factors carefully, recognising that the current rating reflects a comprehensive evaluation of the company’s prospects and risks as of today’s date.
Looking Ahead
For Coffee Day Enterprises Ltd to improve its rating, it will need to demonstrate a sustained turnaround in sales growth, profitability, and debt servicing capacity. Reducing promoter share pledging and stabilising financial results will also be critical to restoring investor confidence. Until such improvements materialise, the 'Strong Sell' rating advises caution and suggests that the stock is best avoided or sold by risk-averse investors.
MarketsMOJO continues to monitor Coffee Day Enterprises Ltd closely, updating ratings and analysis as new data becomes available to ensure investors have the most accurate and timely information.
Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →
