Creative Newtech Ltd Upgraded to Hold by MarketsMOJO on Improved Technicals and Financials

Quality Assessment: Sustained Growth and Profitability

Creative Newtech’s quality parameters remain encouraging, supported by strong quarterly financials for Q3 FY25-26. The company reported its highest-ever net sales of ₹914 crores, with operating profit (PBDIT) reaching ₹26.50 crores and profit before tax (excluding other income) at ₹20.16 crores. These figures underscore a healthy operational momentum.

On a longer-term basis, the company has demonstrated impressive growth rates, with net sales expanding at an annualised rate of 38.09% and operating profit surging by 53.33%. Return on capital employed (ROCE) stands at a respectable 13.4%, indicating efficient utilisation of capital resources. Despite these positives, the PEG ratio of 3.5 suggests that the stock’s price growth has not fully kept pace with earnings expansion, signalling moderate valuation caution.

Valuation: Attractive Relative to Peers

Creative Newtech’s valuation metrics have improved, contributing to the upgrade. The company’s enterprise value to capital employed ratio is a modest 2.5, reflecting an attractive valuation compared to its sector peers. The stock currently trades at a discount relative to historical averages within the miscellaneous industry segment, offering potential upside for value-oriented investors.

However, the company’s market capitalisation grade remains modest at 4, reflecting its relatively small size within the broader market. Domestic mutual funds hold no stake in the company, which may indicate limited institutional conviction or concerns about liquidity and business scalability. This absence of mutual fund participation warrants cautious monitoring.

Financial Trend: Positive Quarterly Results Amid Mixed Returns

The financial trend for Creative Newtech has been largely positive in the recent quarter, with record-breaking sales and profitability metrics. The company’s net sales and operating profits have reached new highs, reflecting strong demand and operational efficiency.

Nevertheless, the stock’s price performance has lagged broader market indices. Over the past month, the stock declined by 4.87%, contrasting with a 2.15% gain in the Sensex. Year-to-date, Creative Newtech’s stock has fallen 9.06%, underperforming the Sensex’s 2.26% decline. Over the last year, the stock’s return was flat at 0.00%, while the Sensex gained 10.6%. This divergence between earnings growth and stock price performance suggests that market sentiment remains cautious despite improving fundamentals.

Technicals: Upgrade from Mildly Bearish to Sideways Trend

The most significant catalyst for the rating upgrade was the improvement in technical indicators. The technical grade shifted from mildly bearish to sideways, signalling a stabilisation in price momentum. Key technical metrics such as the Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Bollinger Bands, and Know Sure Thing (KST) indicators have collectively moved to neutral or slightly positive stances on weekly and monthly charts.

Daily moving averages have shown support near the ₹650 level, with the stock’s recent trading range between ₹644.70 and ₹655.05 indicating consolidation. The absence of a clear downtrend in Dow Theory and On-Balance Volume (OBV) further supports the sideways technical outlook. This technical stabilisation reduces downside risk and provides a foundation for potential upward momentum.

Comparative Performance and Market Context

Creative Newtech’s stock price currently stands at ₹655.05, close to its 52-week low of ₹600.05 but well below the 52-week high of ₹796.00. The stock’s day change of +0.72% on 24 Feb 2026 reflects modest buying interest. Despite the company’s strong financial results, the stock has underperformed the Sensex over multiple time frames, including one month and year-to-date periods.

This underperformance may be attributed to the company’s relatively small market capitalisation and limited institutional ownership, which can constrain liquidity and investor interest. However, the improving technicals and solid financial trends suggest that the stock is beginning to attract renewed attention from market participants.

Outlook and Investment Implications

The upgrade to a Hold rating reflects a more balanced view of Creative Newtech’s prospects. The company’s strong quarterly financials and attractive valuation metrics provide a solid foundation for medium-term growth. Meanwhile, the improved technical trend reduces near-term downside risk, making the stock more appealing to cautious investors.

However, investors should remain mindful of the company’s limited institutional ownership and recent underperformance relative to the broader market. The PEG ratio of 3.5 indicates that the stock’s price appreciation has not fully caught up with earnings growth, suggesting that further upside may require sustained operational momentum and increased market interest.

Overall, Creative Newtech appears poised for a period of consolidation with potential for gradual appreciation, making it a suitable holding for investors seeking exposure to a growing mid-sized player in the miscellaneous sector with improving technical and fundamental characteristics.

Summary of Ratings and Scores

As of 23 Feb 2026, Creative Newtech’s Mojo Grade was upgraded from Sell to Hold, with a current Mojo Score of 54.0. The market capitalisation grade remains at 4, reflecting the company’s modest size. The technical grade improvement from mildly bearish to sideways was the primary driver of the rating change, supported by strong quarterly financial results and attractive valuation metrics.

Key Financial Metrics at a Glance:

• Net Sales (Q3 FY25-26): ₹914.00 crores (highest recorded)
• PBDIT (Q3 FY25-26): ₹26.50 crores (highest recorded)
• PBT less Other Income (Q3 FY25-26): ₹20.16 crores (highest recorded)
• Annualised Net Sales Growth: 38.09%
• Annualised Operating Profit Growth: 53.33%
• ROCE: 13.4%
• Enterprise Value to Capital Employed: 2.5
• PEG Ratio: 3.5

Price Performance Comparison:

• 1 Week Return: +0.54% vs Sensex +0.02%
• 1 Month Return: -4.87% vs Sensex +2.15%
• Year-to-Date Return: -9.06% vs Sensex -2.26%
• 1 Year Return: 0.00% vs Sensex +10.60%

Investors should monitor upcoming quarterly results and technical developments closely to assess whether the stock can sustain its improved momentum and attract broader institutional interest.

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