Understanding the Current Rating
The Strong Sell rating assigned to Goodyear India Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on 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 as of today.
Quality Assessment
As of 28 December 2025, Goodyear India Ltd maintains a good quality grade. This reflects a stable operational foundation and a reasonable level of business integrity. However, despite this positive quality rating, the company’s long-term growth has been disappointing. Operating profit has declined at an annualised rate of -7.89% over the past five years, signalling challenges in sustaining profitability and growth momentum. Additionally, the latest half-year results show a significant contraction in profit after tax (PAT), which has shrunk by 33.33% to ₹27.18 crores, further dampening the quality outlook.
Valuation Considerations
Valuation is a critical factor in the current rating, with Goodyear India Ltd classified as very expensive relative to its fundamentals. The stock trades at a price-to-book ratio of 3.4, which is substantially higher than the average valuations of its sector peers in the Tyres & Rubber Products industry. This premium valuation is not supported by the company’s financial performance, as reflected in a return on equity (ROE) of just 7.2%. Investors should note that the stock’s elevated valuation, combined with deteriorating earnings, raises concerns about its risk-reward profile at present.
Financial Trend Analysis
The financial trend for Goodyear India Ltd is currently negative. The company has reported negative results in the most recent reporting period ending September 2025. Key indicators such as return on capital employed (ROCE) have fallen to a low of 10.28%, and the dividend per share (DPS) has declined to ₹23.90 annually, the lowest in recent years. Over the past year, the stock has delivered a total return of -16.31%, while profits have contracted by 28.9%. This persistent underperformance is also evident in the stock’s consistent lag behind the BSE500 benchmark over the last three years, underscoring the ongoing financial challenges.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Technical Outlook
The technical grade for Goodyear India Ltd is bearish, reflecting negative momentum in the stock price and weak market sentiment. As of 28 December 2025, the stock price has declined by 0.49% on the day, with a one-month return of -3.39% and a three-month return of -13.22%. The six-month and year-to-date returns are also negative at -9.83% and -15.36% respectively. This downward trend is consistent with the broader technical assessment, signalling caution for traders and investors relying on price action and chart patterns.
Implications for Investors
For investors, the Strong Sell rating on Goodyear India Ltd suggests that the stock currently carries significant risks and is expected to underperform. The combination of a high valuation, deteriorating financial results, negative growth trends, and bearish technical signals indicates that the company faces considerable headwinds. Investors should carefully consider these factors before initiating or maintaining positions in the stock, particularly given its small-cap status and sector-specific challenges.
Sector and Market Context
Within the Tyres & Rubber Products sector, Goodyear India Ltd’s performance contrasts with some peers that have managed to sustain growth and maintain more attractive valuations. The stock’s consistent underperformance relative to the BSE500 benchmark over the past three years highlights its relative weakness in the broader market context. This sectoral and market comparison reinforces the rationale behind the current rating and the cautious stance advised by MarketsMOJO.
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Summary
In summary, Goodyear India Ltd’s Strong Sell rating as of 16 December 2025 reflects a comprehensive evaluation of its current financial health and market position as of 28 December 2025. While the company retains a good quality grade, its very expensive valuation, negative financial trends, and bearish technical outlook combine to present a challenging investment case. Investors should weigh these factors carefully and consider alternative opportunities within the sector or broader market that offer more favourable risk-return profiles.
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