Current Rating and Its Implications for Investors
MarketsMOJO’s 'Sell' rating on CRISIL Ltd. indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing 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. The rating was revised on 22 September 2025, reflecting a significant change in the company’s overall assessment, but the following discussion focuses on the stock’s present-day status as of 28 December 2025.
Quality Assessment: Solid Fundamentals but Limited Growth
As of 28 December 2025, CRISIL Ltd. maintains a 'good' quality grade, reflecting stable operational performance and a respectable return on equity (ROE) of 25.8%. The company has demonstrated consistent growth in net sales at an annualised rate of 13.49% over the past five years, alongside operating profit growth of 19.79%. These figures indicate a solid business model with steady profitability. However, the growth trajectory is considered modest relative to high-growth peers in the capital markets sector, which tempers enthusiasm for the stock’s long-term potential.
Valuation: Elevated Price Levels Raise Concerns
Despite the decent quality metrics, CRISIL Ltd. is currently rated as 'very expensive' in terms of valuation. The stock trades at a price-to-book (P/B) ratio of 11.1, which is significantly higher than the average historical valuations of its peer group. This premium valuation is not fully justified by the company’s growth prospects, as evidenced by a price/earnings to growth (PEG) ratio of 3.5, signalling that the stock price may be overextended relative to earnings growth. Investors should be wary of the risk that the market may reassess this valuation premium if growth fails to accelerate.
Financial Trend: Flat Recent Performance Amid Profit Growth
The financial trend for CRISIL Ltd. is currently flat, with the latest quarterly results showing no significant negative triggers but also no marked improvement. Profits have increased by 11.9% over the past year, which is a positive sign, yet this has not translated into share price appreciation. In fact, the stock has underperformed the broader market considerably. As of 28 December 2025, CRISIL Ltd. has delivered a negative return of -23.72% over the last year, while the BSE500 index has generated a positive return of 5.76% over the same period. This divergence highlights investor concerns about the company’s near-term outlook despite steady earnings growth.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Technical Outlook: Bearish Momentum Persists
The technical grade for CRISIL Ltd. is currently bearish, reflecting downward momentum in the stock price. Recent price movements show a decline of 0.8% on the latest trading day, with losses accumulating to -6.02% over the past month and -28.21% over six months. This trend suggests that market sentiment remains weak, and technical indicators do not currently support a near-term recovery. Investors relying on technical analysis may view this as a signal to avoid initiating new positions until a clear reversal pattern emerges.
Market Performance and Peer Comparison
CRISIL Ltd. is classified as a midcap stock within the capital markets sector. Despite its respectable market capitalisation and operational stability, the stock has underperformed its peers and the broader market indices. The negative returns over the past year contrast sharply with the positive performance of the BSE500, underscoring the challenges the company faces in regaining investor confidence. The stock’s valuation premium, combined with flat financial trends and bearish technicals, contributes to the cautious 'Sell' rating.
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What This Means for Investors
For investors, the 'Sell' rating on CRISIL Ltd. serves as a cautionary signal. While the company exhibits good quality fundamentals and steady profit growth, the elevated valuation and bearish technical indicators suggest limited upside potential in the near term. The flat financial trend and underperformance relative to the broader market further reinforce the need for prudence. Investors currently holding the stock may consider reviewing their positions, especially if seeking capital appreciation, while prospective buyers might wait for more favourable valuation levels or a positive shift in technical momentum.
Summary of Key Metrics as of 28 December 2025
• Mojo Score: 37.0 (Sell grade)
• Market Capitalisation: Midcap
• Quality Grade: Good
• Valuation Grade: Very Expensive
• Financial Grade: Flat
• Technical Grade: Bearish
• 1-Year Stock Return: -23.72%
• BSE500 1-Year Return: +5.76%
• ROE: 25.8%
• Price to Book Value: 11.1
• PEG Ratio: 3.5
These figures collectively underpin the current 'Sell' rating and provide a comprehensive view of CRISIL Ltd.’s investment profile as of today.
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