Understanding the Current Rating
The Strong Sell rating assigned to Forbes & Company Ltd indicates a cautious stance for investors, signalling that the stock currently exhibits multiple risk factors outweighing potential rewards. This recommendation is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these dimensions contributes to the overall assessment and helps investors understand the rationale behind the rating.
Quality Assessment
As of 16 February 2026, Forbes & Company Ltd holds an average quality grade. This suggests that while the company maintains some operational stability, it faces challenges in sustaining robust growth and profitability. 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 ratio raises concerns about financial flexibility and the capacity to meet obligations without strain, especially in volatile market conditions.
Valuation Considerations
The stock is currently classified as expensive based on valuation metrics. Trading at a Price to Book Value of 2.1, Forbes & Company Ltd commands a premium relative to its peers’ historical averages. Despite this, the company’s Return on Equity (ROE) stands at a strong 29.6%, reflecting efficient utilisation of shareholder capital. However, the premium valuation is tempered by the company’s subdued long-term growth prospects, with net sales declining at an annualised rate of -42.80% over the past five years. This disconnect between valuation and growth potential is a key factor influencing the cautious rating.
Financial Trend Analysis
The financial trend for Forbes & Company Ltd is currently negative. The latest quarterly results ending December 2025 reveal a significant contraction in profitability, with Profit After Tax (PAT) falling 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 the company’s struggle to generate consistent revenue. Additionally, non-operating income accounted for 42.54% of Profit Before Tax (PBT), indicating reliance on non-core activities to bolster earnings. These factors collectively point to a weakening financial trajectory.
Technical Outlook
From a technical perspective, the stock is rated as mildly bearish. While the stock has delivered a 21.53% return over the past year and a 12.99% gain year-to-date as of 16 February 2026, recent price movements show mixed signals. The one-month return stands at +13.18%, but the three-month and six-month returns are negative at -1.15% and -10.16% respectively. This volatility, combined with a high percentage (98.25%) of promoter shares pledged, adds downward pressure on the stock price, especially in falling markets where forced selling may occur.
Stock Performance and Market Context
Despite the negative fundamentals and technical outlook, Forbes & Company Ltd’s stock price has shown some resilience. The one-day gain of 1.34% on 16 February 2026 reflects short-term buying interest. However, the broader trend remains cautious given the company’s financial challenges and valuation concerns. Investors should weigh these factors carefully, recognising that the current Strong Sell rating signals elevated risk and the need for prudence.
Implications for Investors
For investors, the Strong Sell rating serves as a warning to reconsider exposure to Forbes & Company Ltd at this juncture. The combination of high leverage, declining sales, weak profitability, and expensive valuation suggests limited upside potential and heightened downside risk. Those holding the stock may want to evaluate their positions in light of these factors, while prospective investors should approach with caution and seek further clarity on the company’s turnaround prospects.
Handpicked from 50, scrutinized by experts – Our recent selection, this Mid Cap from Bank - Public, is already delivering results. Don't miss next month's pick!
- - Expert-scrutinized selection
- - Already delivering results
- - Monthly focused approach
Summary of Key Metrics as of 16 February 2026
To summarise the current standing of Forbes & Company Ltd, the company’s microcap status in the Electronics & Appliances sector is marked by a Mojo Score of 28.0, placing it firmly in the Strong Sell category. The stock’s recent price action shows a mixed pattern with a 1-week decline of -2.32% but a positive 1-month return of +13.18%. Over the longer term, the 6-month return is negative at -10.16%, highlighting ongoing volatility.
The company’s financial health is strained by a high debt burden, with a Debt to EBITDA ratio of 3.57 times, signalling limited debt servicing capacity. The negative financial trend is further emphasised by a sharp drop in quarterly PAT and subdued sales figures. Valuation remains elevated despite these headwinds, with a Price to Book ratio of 2.1 and a PEG ratio of 0.1, reflecting a disconnect between price and growth fundamentals.
Promoter share pledging is a notable risk factor, with 98.25% of promoter shares pledged, which could exacerbate price declines in adverse market conditions. Investors should consider these elements carefully when assessing the stock’s outlook.
Conclusion
In conclusion, the Strong Sell rating for Forbes & Company Ltd by MarketsMOJO reflects a comprehensive evaluation of the company’s current challenges and market risks. While the stock has shown some short-term gains, the underlying fundamentals and technical indicators suggest caution. Investors are advised to monitor developments closely and consider the implications of the company’s financial and operational trends before making investment decisions.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
