Current Rating and Its Significance
MarketsMOJO currently assigns a 'Sell' rating to Eveready Industries India Ltd, indicating a cautious stance for investors. This rating suggests that the stock is expected to underperform relative to the broader market or its sector peers in the near to medium term. Investors should consider this recommendation carefully, especially in light of the company’s recent financial and technical performance.
Rating Update Context
The rating was revised to 'Sell' on 06 Nov 2025, reflecting a significant change in the company’s outlook. At that time, the Mojo Score dropped sharply by 30 points, from 67 to 37, signalling a marked deterioration in the stock’s overall assessment. However, it is important to note that all financial data and returns discussed here are current as of 22 January 2026, providing an up-to-date picture of the company’s status.
Quality Assessment
As of 22 January 2026, Eveready Industries India Ltd holds an average quality grade. The company’s ability to generate consistent earnings growth and maintain operational efficiency has been under pressure. Over the past five years, operating profit has declined at an annualised rate of -3.50%, indicating challenges in sustaining long-term growth. Additionally, the company’s earnings per share (EPS) for the latest quarter stood at a negative Rs -1.09, reflecting recent profitability struggles.
Valuation Perspective
Despite the challenges, the valuation grade remains attractive. This suggests that the stock is trading at a relatively low price compared to its earnings potential and asset base. For value-oriented investors, this could represent a potential entry point, but the attractive valuation is tempered by the company’s weak financial trends and technical outlook.
Financial Trend Analysis
The financial trend for Eveready Industries India Ltd is currently flat, signalling stagnation in key financial metrics. The company’s debt profile is a concern, with a high Debt to EBITDA ratio of 2.51 times, indicating limited ability to service its debt obligations comfortably. The debt-equity ratio as of the half-year period is elevated at 3.92 times, further underscoring leverage risks. Moreover, the debtors turnover ratio is low at 1.06 times, suggesting inefficiencies in receivables management.
Technical Outlook
Technically, the stock is rated bearish. Price performance over recent periods has been weak, with the stock declining 15.84% over the past three months and 22.30% over six months. Year-to-date, the stock has fallen 2.38%, and over the last year, it has delivered a negative return of 9.85%. This consistent underperformance against the BSE500 benchmark over the last three years highlights the stock’s lack of momentum and investor confidence.
Performance Summary
As of 22 January 2026, Eveready Industries India Ltd’s stock price movement shows a mixed short-term picture with a 1-day gain of 2.21%, but this is overshadowed by longer-term declines. The one-week and one-month returns are negative at -1.96% and -3.32% respectively, reinforcing the bearish technical stance. The company’s ongoing operational and financial challenges have contributed to this subdued performance.
Implications for Investors
The 'Sell' rating reflects a comprehensive evaluation of Eveready Industries India Ltd’s current fundamentals, valuation, financial trends, and technical indicators. Investors should interpret this as a signal to exercise caution. While the stock’s valuation appears attractive, the underlying quality concerns, flat financial trends, and bearish technical outlook suggest limited upside potential in the near term. Those holding the stock may consider reassessing their positions, while prospective investors might wait for clearer signs of recovery before committing capital.
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Company Profile and Market Position
Eveready Industries India Ltd operates within the FMCG sector and is classified as a small-cap company. The sector is highly competitive, and the company faces pressure from both established players and emerging brands. The current financial and operational metrics suggest that Eveready is struggling to maintain its market share and profitability in this challenging environment.
Debt and Liquidity Considerations
One of the critical concerns for investors is the company’s elevated leverage. The high debt-equity ratio of 3.92 times and Debt to EBITDA ratio of 2.51 times indicate significant financial risk. This level of indebtedness may constrain the company’s ability to invest in growth initiatives or weather economic downturns. Furthermore, the low debtors turnover ratio of 1.06 times points to potential issues in cash flow management, which could impact liquidity.
Long-Term Growth Prospects
The company’s operating profit has declined at an annualised rate of -3.50% over the last five years, signalling weak long-term growth prospects. This trend, combined with flat recent financial results and negative quarterly EPS, suggests that the company is facing structural challenges that may take time to resolve. Investors should weigh these factors carefully when considering the stock’s future potential.
Stock Performance Relative to Benchmark
Eveready Industries India Ltd has consistently underperformed the BSE500 benchmark over the past three years. The stock’s negative 10.34% return over the last year further highlights its relative weakness. This persistent underperformance is a key factor behind the current 'Sell' rating, as it reflects both market sentiment and fundamental challenges.
Conclusion
In summary, Eveready Industries India Ltd’s 'Sell' rating by MarketsMOJO is grounded in a thorough analysis of its current financial health, valuation, technical trends, and quality metrics as of 22 January 2026. While the stock’s valuation may appear attractive, the company’s high leverage, flat financial trends, and bearish technical signals suggest limited near-term upside. Investors should approach this stock with caution and consider alternative opportunities within the FMCG sector or broader market.
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