Understanding the Current Rating
The 'Sell' rating assigned to CRISIL Ltd. indicates a cautious stance for investors, suggesting that the stock may underperform relative to the broader market or its sector peers in the near term. 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 stock’s investment potential.
Quality Assessment
As of 11 February 2026, CRISIL Ltd. maintains a good quality grade. This reflects the company’s solid operational performance and consistent profitability. Over the past five years, the company has demonstrated moderate growth, with net sales increasing at an annualised rate of 13.49% and operating profit expanding by 19.79%. These figures indicate a stable business model with reasonable growth prospects, supported by a return on equity (ROE) of 25.8%, which is robust and suggests efficient capital utilisation.
Valuation Considerations
Despite the favourable 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 12.1, significantly higher than its historical averages and peer group benchmarks. This premium valuation implies that investors are paying a substantial price for the company’s earnings and assets, which raises concerns about limited upside potential. The price-earnings-to-growth (PEG) ratio stands at 3.8, further signalling that the stock’s price growth may not be fully justified by its earnings growth trajectory.
Financial Trend Analysis
The financial trend for CRISIL Ltd. is currently flat. The latest quarterly results for September 2025 showed no significant negative triggers, but also lacked strong catalysts for growth acceleration. Profitability has improved modestly, with profits rising by 11.9% over the past year. However, this has not translated into positive stock returns, as the share price has declined by 12.81% over the same period. This divergence between earnings growth and stock performance suggests that market sentiment remains cautious, possibly due to valuation concerns or broader sector dynamics.
Technical Outlook
From a technical perspective, the stock is rated as mildly bearish. Recent price movements show mixed signals: while the stock gained 0.88% on the latest trading day and has posted a year-to-date return of 9.06%, it has underperformed the broader market indices over the last six months (-9.74%) and one year (-12.81%). This underperformance contrasts with the BSE500 index, which has delivered a 12.69% return over the past year, highlighting relative weakness in CRISIL’s price momentum.
Stock Performance Snapshot
As of 11 February 2026, CRISIL Ltd.’s stock performance is characterised by short-term volatility and longer-term underperformance. The stock’s returns over various periods are as follows: 1 day +0.88%, 1 week +0.63%, 1 month -0.55%, 3 months +0.05%, 6 months -9.74%, year-to-date +9.06%, and 1 year -12.81%. This pattern suggests that while there is some recent positive momentum, the stock has struggled to maintain consistent gains over extended periods.
Implications for Investors
The current 'Sell' rating advises investors to exercise caution with CRISIL Ltd. shares. The combination of a high valuation, flat financial trends, and a mildly bearish technical outlook indicates limited near-term upside and potential downside risk. Investors should carefully consider whether the premium price adequately compensates for the risks associated with the stock’s growth prospects and market sentiment.
Sector and Market Context
Operating within the Capital Markets sector, CRISIL Ltd. faces competitive pressures and market dynamics that influence its valuation and performance. The stock’s underperformance relative to the BSE500 index over the past year underscores the challenges it faces in delivering superior returns compared to the broader market. This context is important for investors seeking to balance sector exposure with risk management.
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Summary of Key Metrics
To summarise, CRISIL Ltd.’s current rating of 'Sell' by MarketsMOJO is supported by the following key metrics as of 11 February 2026:
- Mojo Score: 42.0 (reflecting a cautious stance)
- Quality Grade: Good (stable operational performance)
- Valuation Grade: Very Expensive (P/B ratio of 12.1, PEG ratio of 3.8)
- Financial Grade: Flat (modest profit growth but no strong catalysts)
- Technical Grade: Mildly Bearish (recent underperformance relative to market)
Investors should weigh these factors carefully when considering CRISIL Ltd. as part of their portfolio, recognising the balance between solid business quality and stretched valuation levels.
Looking Ahead
While CRISIL Ltd. continues to demonstrate operational resilience, the current market pricing suggests that expectations are already high. Any future improvement in earnings growth or a re-rating of valuation multiples could alter the investment outlook. Conversely, sustained market weakness or disappointing financial results may reinforce the current cautious stance.
For investors, understanding the nuances behind the 'Sell' rating is crucial. It does not necessarily imply an immediate sell-off but rather signals that the stock may not be the most attractive option given its current price and risk profile. Monitoring upcoming quarterly results, sector developments, and broader market trends will be essential to reassess the stock’s potential.
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