Eco Recycling Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO currently assigns Eco Recycling Ltd a 'Sell' rating, indicating a cautious stance towards the stock. This rating suggests that investors should consider reducing exposure or avoiding new purchases at present, given the company's valuation, financial trends, and technical outlook. The rating was last revised on 13 Nov 2025, when the Mojo Score improved slightly from 27 to 30, moving the grade from 'Strong Sell' to 'Sell'. Despite this modest improvement, the recommendation remains negative, reflecting ongoing challenges.

Here’s How Eco Recycling Ltd Looks Today

As of 01 January 2026, Eco Recycling Ltd remains a microcap company operating within the Other Utilities sector. The stock has experienced significant volatility and underperformance relative to the broader market. Over the past year, the stock has delivered a negative return of -54.16%, starkly contrasting with the BSE500 index’s positive 6.41% return over the same period. This divergence highlights the stock’s struggles amid broader market gains.

On a shorter-term basis, the stock’s performance remains weak, with a 3-month decline of -22.25% and a 6-month drop of -25.67%. Even the year-to-date return is modestly positive at +1.25%, reflecting some recent recovery but not enough to offset the longer-term downtrend.

Quality Assessment

The company’s quality grade is assessed as average. This reflects a middling operational and financial health profile. While Eco Recycling Ltd maintains a respectable return on equity (ROE) of 20.3%, this has not translated into consistent profit growth. In fact, profits have declined by 12.8% over the past year, signalling challenges in sustaining earnings momentum. Additionally, the company’s debtor turnover ratio stands at a low 3.38 times, indicating slower collection cycles which can strain working capital management.

Valuation Considerations

Valuation remains a significant concern for investors. The stock is classified as very expensive, trading at a price-to-book (P/B) ratio of 8.5, which is a substantial premium compared to its peers and historical averages. This elevated valuation is difficult to justify given the company’s flat financial trend and recent profit decline. The absence of dividend payouts, with a dividend payout ratio (DPR) of 0.00%, further limits the stock’s appeal to income-focused investors.

Financial Trend and Stability

Financially, Eco Recycling Ltd exhibits a flat trend, with no significant growth or deterioration in recent quarters. The company reported flat results in September 2025, underscoring the lack of positive momentum. The flat financial trend, combined with declining profits and slow debtor turnover, suggests operational challenges that may hinder near-term improvement. Moreover, the company’s microcap status and limited institutional interest—domestic mutual funds hold 0% stake—may reflect concerns about liquidity and business prospects.

Technical Outlook

From a technical perspective, the stock is currently bearish. The downward price trend over the past six months and one year, coupled with negative returns of -25.67% and -54.16% respectively, indicates persistent selling pressure. Despite a slight positive movement on the last trading day (+1.25%), the overall technical signals do not support a reversal or sustained recovery at this stage.

Implications for Investors

For investors, the 'Sell' rating on Eco Recycling Ltd suggests caution. The combination of a very expensive valuation, flat financial performance, average quality metrics, and bearish technical indicators implies that the stock may continue to underperform or remain volatile in the near term. Investors should carefully weigh these factors against their risk tolerance and portfolio objectives before considering exposure to this stock.

Summary

In summary, Eco Recycling Ltd’s current 'Sell' rating by MarketsMOJO reflects a cautious outlook based on a comprehensive evaluation of quality, valuation, financial trends, and technical factors. While the rating was last updated on 13 Nov 2025, the analysis here is grounded in the latest data as of 01 January 2026, ensuring investors have an up-to-date perspective. The stock’s very expensive valuation, flat financial performance, and bearish technical signals suggest limited upside potential at present. Investors should remain vigilant and consider these factors carefully when making investment decisions regarding Eco Recycling Ltd.

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