Current Rating and Its Implications
MarketsMOJO’s 'Sell' rating for CP Capital Limited indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing their exposure or avoiding new purchases at this time. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment potential.
Quality Assessment
As of 19 February 2026, CP Capital Limited’s quality grade is classified as average. The company’s management efficiency, as measured by Return on Equity (ROE), stands at a modest 5.18%. This figure indicates that the company generates relatively low profitability per unit of shareholders’ funds, which is a concern for investors seeking robust earnings growth. Additionally, the company has experienced a slight decline in net sales over the past five years, with an annual growth rate of -0.33%, signalling challenges in expanding its revenue base.
Valuation Perspective
Despite the concerns around quality, CP Capital Limited’s valuation grade is considered very attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings and asset base. For value-oriented investors, this could represent an opportunity to acquire shares at a discount. However, valuation alone does not guarantee positive returns, especially when other fundamental and technical factors are less favourable.
Financial Trend Analysis
The financial trend for CP Capital Limited is currently flat, reflecting a lack of significant improvement or deterioration in key financial metrics. Recent data shows that interest expenses for the latest six months have increased by 84.72% to ₹3.99 crores, which could pressure profitability. The operating profit to interest coverage ratio is at a low 7.49 times, indicating limited buffer to cover interest obligations. Furthermore, the debt-to-equity ratio has risen to 0.14 times, the highest level recorded in the half-year period, signalling a modest increase in leverage.
Technical Outlook
From a technical standpoint, the stock exhibits a mildly bearish trend. Price performance over various time frames highlights significant weakness: the stock has declined by 70.64% over the past year, 29.39% over six months, and 15.39% over three months. Even the one-day and one-week changes, which show modest gains of 2.73% and 2.21% respectively, do not offset the longer-term downtrend. This technical picture suggests that market sentiment remains subdued, and the stock faces resistance in reversing its downward trajectory.
Performance Relative to Benchmarks
CP Capital Limited’s underperformance is further underscored by its comparison with broader market indices. The stock has lagged behind the BSE500 index over the last three years, one year, and three months, indicating that it has not kept pace with the general market recovery or growth. Year-to-date, the stock is down 13.03%, reinforcing the cautious outlook for investors.
Summary of Key Metrics as of 19 February 2026
- Mojo Score: 45.0 (Sell grade)
- Return on Equity (ROE): 5.18%
- Net Sales Growth (5-year CAGR): -0.33%
- Interest Expense (latest 6 months): ₹3.99 crores, up 84.72%
- Operating Profit to Interest Coverage Ratio: 7.49 times
- Debt-to-Equity Ratio (Half Year): 0.14 times
- Stock Returns: 1D +2.73%, 1W +2.21%, 1M -10.17%, 3M -15.39%, 6M -29.39%, YTD -13.03%, 1Y -70.64%
What This Means for Investors
The 'Sell' rating on CP Capital Limited reflects a combination of average quality, attractive valuation, flat financial trends, and a mildly bearish technical outlook. For investors, this suggests that while the stock may be undervalued, the underlying business fundamentals and market sentiment do not currently support a positive investment thesis. The company’s low profitability, stagnant sales growth, rising interest costs, and increasing leverage raise concerns about its ability to generate sustainable returns.
Investors should carefully weigh these factors before considering any position in CP Capital Limited. The current rating advises prudence, signalling that the stock may face continued headwinds in the near term. Monitoring future developments in the company’s operational performance and financial health will be essential to reassess its investment potential.
Strong fundamentals, solid momentum, fair price – This Large Cap from the NBFC sector checks every box for our Top 1%. This should definitely be on your radar!
- - Complete fundamentals package
- - Technical momentum confirmed
- - Reasonable valuation entry
Conclusion
CP Capital Limited’s current 'Sell' rating by MarketsMOJO, last updated on 07 April 2025, is supported by the latest data as of 19 February 2026. The company’s average quality, very attractive valuation, flat financial trend, and mildly bearish technicals collectively inform this cautious stance. While the valuation may appeal to some investors, the broader fundamental and technical challenges suggest that the stock is not positioned favourably for near-term gains.
Investors should remain vigilant and consider these factors carefully when making portfolio decisions involving CP Capital Limited. Continued monitoring of the company’s financial performance and market conditions will be crucial to identify any potential shifts in its outlook.
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