Rating Overview and Context
On 22 September 2025, MarketsMOJO revised CRISIL Ltd.’s rating from 'Hold' to 'Sell', accompanied by a significant drop in its Mojo Score from 58 to 42. This adjustment reflects a reassessment of the company’s overall investment appeal based on a comprehensive evaluation of multiple parameters. While the rating change occurred several months ago, it remains pertinent to understand how the stock currently stands in the market, especially given the dynamic nature of financial markets and company performance.
Current Fundamentals and Financial Metrics
As of 20 January 2026, CRISIL Ltd. is classified as a midcap company operating within the Capital Markets sector. The latest data shows the company’s financial performance has been relatively flat in recent quarters, with no significant negative triggers reported in the September 2025 results. Net sales have grown at an annualised rate of 13.49% over the past five years, while operating profit has expanded at a slightly higher rate of 19.79% annually. This moderate growth trajectory indicates steady but unspectacular expansion.
Despite this growth, the company’s return on equity (ROE) remains robust at 25.8%, signalling efficient capital utilisation. However, this strong profitability is juxtaposed with a valuation that MarketsMOJO considers very expensive. The stock trades at a price-to-book (P/B) ratio of 12.5, which is substantially higher than the average historical valuations of its peers. This premium valuation suggests that investors are paying a significant price for the company’s earnings and asset base, which may not be justified given the current growth outlook.
Valuation and Market Performance
The valuation grade assigned to CRISIL Ltd. is 'very expensive', reflecting concerns about the stock’s elevated price levels relative to its fundamentals. The price-to-earnings growth (PEG) ratio stands at 3.9, indicating that the stock’s price growth expectations are high compared to its earnings growth rate. Over the past year, the stock has delivered a negative return of -12.97%, underperforming the broader BSE500 index, which has generated a positive return of 6.13% during the same period. This underperformance highlights the challenges the stock faces in meeting investor expectations amid its lofty valuation.
Financial Trend and Technical Outlook
The financial grade for CRISIL Ltd. is currently rated as 'flat', signalling a lack of significant upward or downward momentum in key financial indicators. This stability, while positive in avoiding deterioration, does not provide a strong catalyst for price appreciation. From a technical perspective, the stock is graded as 'mildly bearish', reflecting recent price trends and momentum indicators that suggest a cautious stance among traders and investors. The one-day price change as of 20 January 2026 was -0.33%, with a one-month gain of 9.29% offset by declines over longer periods such as six months (-18.92%) and one year (-12.97%).
Quality Assessment
CRISIL Ltd. holds a 'good' quality grade, indicating sound business fundamentals, consistent profitability, and a stable operational model. The company’s ability to maintain a high ROE and steady sales growth over the medium term supports this assessment. However, the quality alone does not compensate for the valuation concerns and subdued financial trends, which collectively influence the overall rating.
What the 'Sell' Rating Means for Investors
The 'Sell' rating assigned by MarketsMOJO suggests that investors should exercise caution with CRISIL Ltd. shares at current price levels. The rating reflects a combination of factors: a very expensive valuation that limits upside potential, flat financial trends that offer little momentum, and a mildly bearish technical outlook. While the company’s quality remains good, the premium investors pay for the stock is not adequately supported by growth prospects or market performance.
For investors, this rating implies that CRISIL Ltd. may not be an attractive buy at present and could be vulnerable to price corrections if market sentiment shifts or if growth disappoints. It is advisable to monitor the company’s financial results and valuation metrics closely, and consider alternative investment opportunities with more favourable risk-reward profiles.
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Comparative Market Context
When viewed against the broader market, CRISIL Ltd.’s performance and valuation stand out as areas of concern. The BSE500 index’s positive return of 6.13% over the past year contrasts sharply with CRISIL’s negative 12.97% return, underscoring the stock’s relative weakness. This divergence suggests that investors have favoured other sectors or companies with stronger growth prospects or more reasonable valuations.
Moreover, the company’s premium valuation multiples imply that the market has priced in expectations of sustained high profitability and growth. Given the flat financial trends and modest sales growth, these expectations may be overly optimistic, increasing the risk of a valuation correction.
Outlook and Considerations
Looking ahead, CRISIL Ltd. will need to demonstrate stronger financial momentum and justify its premium valuation through improved earnings growth or operational efficiencies. Investors should watch for quarterly results and management commentary for signs of acceleration or strategic initiatives that could alter the current outlook.
Until such developments materialise, the 'Sell' rating serves as a prudent cautionary signal. It encourages investors to reassess their exposure to the stock and consider reallocating capital to opportunities with more compelling risk-adjusted returns.
Summary
In summary, CRISIL Ltd. is currently rated 'Sell' by MarketsMOJO, a rating established on 22 September 2025 but reflecting the stock’s position as of 20 January 2026. The rating is driven by a combination of good quality fundamentals, very expensive valuation, flat financial trends, and a mildly bearish technical outlook. The stock’s underperformance relative to the market and elevated price multiples suggest limited upside potential at present, advising investors to approach with caution.
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