Understanding the Current Rating
The 'Sell' rating assigned to CRISIL Ltd. by MarketsMOJO indicates a cautious stance for investors considering this stock at present. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. While the rating was set in late September 2025, the following analysis uses the latest available data as of 23 February 2026 to provide a clear picture of the stock’s current investment appeal.
Quality Assessment
CRISIL Ltd. maintains a good quality grade, reflecting a stable business model and consistent operational performance. The company’s return on equity (ROE) stands at a robust 25.3%, signalling efficient utilisation of shareholder funds. Despite this, the company’s net sales growth over the past five years has been moderate, with a compound annual growth rate (CAGR) of 12.99%, which is considered modest for a midcap player in the capital markets sector. This moderate growth rate suggests that while CRISIL has a solid foundation, its expansion trajectory is not particularly aggressive.
Valuation Considerations
Valuation is a significant factor influencing the current 'Sell' rating. As of 23 February 2026, CRISIL is classified as very expensive with a price-to-book (P/B) ratio of 10.9. This elevated valuation indicates that the stock is trading at a premium compared to its book value, which may limit upside potential for investors seeking value opportunities. The company’s price-to-earnings growth (PEG) ratio is 3.6, further underscoring the expensive nature of the stock relative to its earnings growth prospects. While the stock’s valuation is in line with historical averages for its peer group, the premium pricing demands strong future growth to justify the current market price.
Financial Trend Analysis
The financial trend for CRISIL Ltd. is currently flat. The company reported flat results in the December 2025 quarter, indicating a pause in earnings momentum. Over the past year, profits have increased by 12%, which is a positive sign; however, this has not translated into commensurate stock price appreciation. The stock has delivered a negative return of -1.23% over the last 12 months, underperforming the broader market benchmark BSE500, which has generated returns of 13.27% in the same period. This divergence suggests that despite modest profit growth, investor sentiment remains subdued, possibly due to valuation concerns and lack of strong catalysts.
Technical Outlook
From a technical perspective, CRISIL Ltd. is rated as mildly bullish. The stock has shown some short-term resilience, with a 1-day gain of 0.92%, a 1-month increase of 2.84%, and a year-to-date return of 6.58%. However, the six-month performance reveals a decline of 13.17%, reflecting volatility and uncertainty in the medium term. The mildly bullish technical grade suggests that while there may be some near-term buying interest, the overall trend lacks strong conviction, reinforcing the cautious stance implied by the 'Sell' rating.
Stock Performance Summary
As of 23 February 2026, CRISIL Ltd.’s stock performance presents a mixed picture. The stock has marginally outperformed in the very short term but has struggled over longer horizons. The 3-month return is a modest 1.93%, and the 1-week gain is 0.38%. These figures contrast with the broader market’s stronger performance, highlighting the stock’s relative underperformance. Investors should weigh these returns against the company’s valuation and financial trends when considering their portfolio allocation.
Implications for Investors
The 'Sell' rating on CRISIL Ltd. suggests that investors should exercise caution. The combination of a very expensive valuation, flat financial trends, and moderate quality metrics indicates limited upside potential in the near term. While the company remains fundamentally sound with a good quality grade and strong ROE, the premium pricing and subdued earnings momentum reduce the attractiveness of the stock for value-oriented or growth-focused investors. Those holding the stock may consider reassessing their positions in light of these factors, while prospective investors might look for more compelling entry points or alternative opportunities within the capital markets sector.
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Contextualising CRISIL’s Market Position
CRISIL Ltd. operates within the capital markets sector as a midcap company, providing credit ratings, research, and risk and policy advisory services. Its market capitalisation and sector positioning place it among key players in the financial services ecosystem. Despite its established presence, the company’s recent performance and valuation metrics suggest that it is currently facing headwinds that temper investor enthusiasm.
The stock’s underperformance relative to the BSE500 index over the past year is notable. While the broader market has delivered a healthy 13.27% return, CRISIL’s negative 1.23% return highlights challenges in sustaining investor confidence. This divergence may be attributed to the stock’s expensive valuation and flat financial results, which have not met market expectations for growth or value creation.
Long-Term Growth Prospects
Examining the company’s long-term growth, the net sales CAGR of 12.99% over five years indicates steady but unspectacular expansion. This growth rate, while positive, may not be sufficient to justify the current premium valuation, especially in a competitive sector where investors often seek higher growth multiples. The flat financial trend observed recently further emphasises the need for stronger operational momentum to support a more favourable rating.
Summary of Key Metrics as of 23 February 2026
- Mojo Score: 42.0 (Sell Grade)
- Return on Equity (ROE): 25.3%
- Price to Book Value (P/B): 10.9 (Very Expensive)
- Price to Earnings Growth (PEG) Ratio: 3.6
- 1-Year Stock Return: -1.23%
- BSE500 1-Year Return: +13.27%
- Net Sales CAGR (5 years): 12.99%
- Financial Trend: Flat
- Technical Grade: Mildly Bullish
These metrics collectively underpin the current 'Sell' rating, signalling that while CRISIL Ltd. remains a quality company, its valuation and recent financial trends warrant a cautious approach from investors.
Conclusion
In conclusion, CRISIL Ltd.’s 'Sell' rating by MarketsMOJO reflects a balanced assessment of its current market standing. The rating, last updated on 22 September 2025, remains relevant today given the company’s financial and technical profile as of 23 February 2026. Investors should consider the implications of the stock’s expensive valuation, flat financial trends, and relative underperformance when making investment decisions. While the company’s quality metrics remain sound, the overall outlook suggests limited near-term upside, favouring a cautious stance in portfolio allocation.
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