Understanding the Current Rating
The Strong Sell rating assigned to Forbes & Company Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal.
Quality Assessment
As of 05 February 2026, Forbes & Company Ltd holds an average quality grade. This reflects a mixed operational profile where certain aspects such as product offerings and market presence remain stable, but underlying financial health raises concerns. Notably, the company’s ability to service its debt is limited, with a high Debt to EBITDA ratio of 3.57 times. This elevated leverage level suggests increased financial risk, particularly in volatile market conditions.
Additionally, the company’s long-term growth trajectory appears weak. Over the past five years, net sales have declined at an annualised rate of -42.80%, signalling challenges in expanding revenue streams. The latest quarterly results for December 2025 further highlight operational difficulties, with profit after tax (PAT) falling sharply by 75.4% to ₹4.19 crores compared to the previous four-quarter average. Net sales for the quarter were also at a low ₹17.80 crores, underscoring subdued demand or operational inefficiencies.
Valuation Considerations
Despite the operational challenges, Forbes & Company Ltd is currently viewed as expensive relative to its fundamentals. The stock trades at a Price to Book Value of 2.2, which is a premium compared to its sector peers. This valuation is somewhat at odds with the company’s financial performance, suggesting that market expectations may be optimistic or that the stock is influenced by factors beyond immediate fundamentals.
However, the company’s return on equity (ROE) stands at a robust 29.6%, indicating efficient utilisation of shareholder funds in generating profits. Over the past year, the stock has delivered a total return of 9.26%, while profits have surged by 132.3%. This disparity results in a low PEG ratio of 0.1, which traditionally signals undervaluation relative to earnings growth. Yet, investors should weigh this against the company’s deteriorating sales and profitability trends.
Financial Trend Analysis
The financial grade for Forbes & Company Ltd is currently negative, reflecting the downward pressure on key metrics. The company’s net sales and profitability have shown significant weakness in recent quarters, and the high proportion of non-operating income—42.54% of profit before tax in the latest quarter—raises questions about the sustainability of earnings quality.
Moreover, a critical risk factor is the high level of promoter share pledging, with 98.25% of promoter shares pledged as of today. This situation can exert additional downward pressure on the stock price during market downturns, as pledged shares may be sold to meet margin calls, increasing volatility and risk for investors.
Technical Outlook
From a technical perspective, the stock is rated as mildly bearish. Recent price movements show a mixed pattern: while the stock has gained 18.44% over the past month and 20.43% year-to-date, it has also declined by 10.79% over the last six months and dropped 9.17% in the past week. The one-day change as of 05 February 2026 was -0.54%, indicating short-term selling pressure.
These fluctuations suggest that while there may be intermittent buying interest, the overall trend lacks strong upward momentum. Investors relying on technical analysis should approach the stock with caution, considering the broader fundamental weaknesses.
Here’s How the Stock Looks Today
As of 05 February 2026, Forbes & Company Ltd presents a challenging investment case. The combination of average quality, expensive valuation, negative financial trends, and mildly bearish technical signals supports the current Strong Sell rating. Investors should be aware that the company’s operational struggles, high debt levels, and promoter share pledging pose significant risks.
While the stock has shown some positive returns in the short term, these gains are overshadowed by the underlying deterioration in sales and profitability. The elevated valuation multiples further caution against assuming a quick turnaround without clear evidence of sustained improvement.
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What This Rating Means for Investors
For investors, a Strong Sell rating from MarketsMOJO signals that caution is warranted. It suggests that the stock is expected to underperform and that there are material risks that could impact capital preservation. Investors should carefully consider their risk tolerance and investment horizon before holding or adding to positions in Forbes & Company Ltd.
Given the company’s current financial challenges and valuation concerns, those seeking exposure to the Electronics & Appliances sector might explore alternatives with stronger fundamentals and more favourable technical setups. For existing shareholders, monitoring quarterly results and debt servicing capacity will be crucial to reassessing the stock’s outlook.
Summary of Key Metrics as of 05 February 2026
- Market Capitalisation: Microcap segment
- Debt to EBITDA Ratio: 3.57 times (high leverage)
- Net Sales Growth (5-year CAGR): -42.80%
- Latest Quarterly PAT: ₹4.19 crores, down 75.4%
- Price to Book Value: 2.2 (expensive valuation)
- Return on Equity: 29.6%
- Stock Returns: 1 Year +9.26%, 1 Month +18.44%, 6 Months -10.79%
- Promoter Shares Pledged: 98.25%
These figures collectively underpin the current Strong Sell recommendation, reflecting a stock that faces significant headwinds despite some pockets of positive performance.
Looking Ahead
Investors should continue to track Forbes & Company Ltd’s operational performance and market conditions closely. Any meaningful improvement in sales growth, debt reduction, or earnings quality could alter the investment thesis. Until then, the prevailing risks justify a cautious approach aligned with the current rating.
Conclusion
In summary, Forbes & Company Ltd’s Strong Sell rating as of 30 January 2026 remains appropriate given the company’s financial and technical profile as of 05 February 2026. The stock’s elevated valuation, weak growth, high leverage, and promoter share pledging combine to create a challenging environment for investors. Careful consideration and ongoing monitoring are advised for those with exposure to this microcap Electronics & Appliances stock.
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