Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating for Empire Industries 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 rating is based on a comprehensive evaluation of the company’s quality, valuation, financial trend, and technical indicators. The rating was revised on 17 Nov 2025, reflecting a decline in the overall Mojo Score from 61 to 40, signalling a weaker outlook compared to previous assessments.
Here’s How the Stock Looks Today
As of 25 December 2025, Empire Industries Ltd is classified as a microcap company operating within the diversified sector. The latest data shows a Mojo Score of 40.0, which corresponds to a 'Sell' grade. This score reflects a combination of factors that investors should carefully consider before making investment decisions.
Quality Assessment
The company’s quality grade is currently rated as average. This suggests that while Empire Industries Ltd maintains a baseline operational standard, it lacks the robust fundamentals that typically characterise higher-quality stocks. Notably, the company’s ability to service its debt remains weak, with an EBIT to Interest (average) ratio of just 1.62. This low coverage ratio indicates limited earnings buffer to comfortably meet interest obligations, raising concerns about financial stability.
Additionally, the company’s long-term growth prospects appear subdued. Operating profit has declined at an annualised rate of -1.64% over the past five years, signalling challenges in expanding core profitability. The return on capital employed (ROCE) for the half-year ended September 2025 stands at a modest 13.70%, which is the lowest in recent periods, further underscoring the tepid operational efficiency.
Valuation Perspective
Despite the concerns on quality, the valuation grade is rated as very attractive. This indicates that the stock is trading at a price level that could be considered a bargain relative to its earnings and asset base. For value-oriented investors, this may present an opportunity to acquire shares at a discount. However, the attractive valuation must be weighed against the company’s weak financial trends and technical outlook.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend Analysis
The financial grade for Empire Industries Ltd is flat, indicating stagnation in key financial metrics. The company reported flat results in the September 2025 quarter, with non-operating income constituting a significant 33.84% of profit before tax (PBT). This reliance on non-core income sources may not be sustainable in the long term.
Interest expenses remain high, with quarterly interest costs reaching ₹7.92 crores, which further pressures profitability. The flat financial trend, combined with weak debt servicing ability, suggests limited momentum in improving the company’s financial health.
Technical Outlook
Technically, the stock is rated bearish. The recent price performance reflects this negative sentiment, with the stock declining by 1.81% on the day of analysis and showing a 29.01% loss over the past year. The stock has also underperformed the BSE500 index over the last three years, one year, and three months, signalling persistent weakness relative to the broader market.
Short-term price movements have been volatile, with a 3-month decline of 13.81% and a 6-month drop of 11.62%. Although there was a slight 0.32% gain over the past month, this is insufficient to offset the broader downtrend. The bearish technical grade advises caution for traders and investors alike.
Additional Considerations
Despite its microcap status, Empire Industries Ltd has negligible domestic mutual fund ownership, with funds holding 0% of the company. Given that mutual funds often conduct thorough research before investing, their absence may reflect concerns about the company’s business model or valuation at current levels.
Investors should also note the company’s below-par performance in both the long and near term, which aligns with the 'Sell' rating. The combination of average quality, very attractive valuation, flat financial trends, and bearish technicals paints a challenging picture for Empire Industries Ltd at present.
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What This Means for Investors
For investors, the 'Sell' rating on Empire Industries Ltd suggests prudence. The stock’s current fundamentals and technical indicators do not support a positive outlook in the near term. While the valuation appears attractive, this alone does not compensate for the company’s weak financial trends and operational challenges.
Investors seeking exposure to the diversified sector may want to consider alternative opportunities with stronger quality metrics and more favourable technical momentum. Those holding the stock should carefully evaluate their risk tolerance and investment horizon, as the current environment points to continued headwinds.
In summary, the MarketsMOJO 'Sell' rating reflects a comprehensive assessment of Empire Industries Ltd’s current position as of 25 December 2025, advising caution and careful consideration before committing capital.
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