Understanding the Current Rating
The Strong Sell rating assigned to Gujarat Apollo Industries Ltd indicates a cautious stance for investors, signalling significant concerns across multiple dimensions of the company’s health and market performance. This rating is the result of a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment and helps investors understand the risks involved in holding or acquiring this stock at present.
Quality Assessment
As of 09 February 2026, Gujarat Apollo Industries Ltd exhibits below-average quality metrics. The company has reported operating losses and a weak ability to service its debt, with an average EBIT to interest ratio of -4.38. This negative ratio highlights that earnings before interest and taxes are insufficient to cover interest expenses, raising concerns about financial sustainability. Additionally, the company has posted negative returns on capital employed (ROCE), reflecting inefficient use of capital and ongoing operational challenges.
Valuation Considerations
The valuation grade for Gujarat Apollo Industries Ltd is classified as risky. Despite the stock generating a positive return of 9.18% over the past year, this performance masks deeper issues. The company’s profits have declined sharply by 125.8% during the same period, indicating that the stock price appreciation is not supported by fundamental earnings growth. This disconnect suggests that the stock may be overvalued relative to its underlying financial health, increasing the risk for investors seeking value-based opportunities.
Financial Trend Analysis
The financial trend for Gujarat Apollo Industries Ltd is negative, with the company reporting losses for seven consecutive quarters. The latest quarterly figures show a profit before tax (excluding other income) of -₹4.74 crores, down 53.4%, and a net profit after tax of ₹2.34 crores, which has fallen by 51.1%. Interest expenses have surged by 65.74% to ₹3.58 crores over nine months, further straining the company’s finances. These trends underscore deteriorating profitability and increasing financial pressure, which weigh heavily on the stock’s outlook.
Technical Outlook
From a technical perspective, the stock is mildly bearish. Recent price movements show a 0.23% gain on the day of analysis, but the stock has declined by 1.31% over the past month and 15.40% over three months. The six-month and year-to-date returns are also negative at -12.07% and -6.55%, respectively. These patterns suggest a lack of upward momentum and potential resistance levels that may limit near-term gains.
Additional Market Insights
Gujarat Apollo Industries Ltd is classified as a microcap within the industrial manufacturing sector. Despite its size, domestic mutual funds hold no stake in the company, which may reflect a lack of confidence or interest from institutional investors who typically conduct thorough due diligence. This absence of institutional backing can be a red flag for retail investors, signalling potential liquidity and governance concerns.
Stock Returns Snapshot
As of 09 February 2026, the stock’s returns are mixed across different time frames. While the one-year return is positive at 9.18%, shorter-term returns have been negative, including a 15.40% decline over three months and a 6.55% drop year-to-date. This volatility highlights the stock’s uncertain trajectory and reinforces the need for careful consideration before investment.
Our current monthly pick, this Mid Cap from Automobile Two & Three Wheelers, survived rigorous evaluation against dozens of contenders. See why experts are backing this one!
- - Rigorous evaluation cleared
- - Expert-backed selection
- - Mid Cap conviction pick
What This Rating Means for Investors
The Strong Sell rating from MarketsMOJO serves as a cautionary signal for investors. It suggests that the stock currently carries elevated risks due to weak fundamentals, deteriorating financial trends, and unfavourable valuation metrics. Investors should be wary of potential capital erosion and consider alternative opportunities with stronger financial health and growth prospects.
For those holding Gujarat Apollo Industries Ltd shares, this rating advises a thorough review of portfolio exposure and risk tolerance. The company’s ongoing losses and rising interest burden may continue to pressure earnings and share price performance. Prospective investors should seek clear signs of operational turnaround and financial stability before considering entry.
Sector and Market Context
Operating within the industrial manufacturing sector, Gujarat Apollo Industries Ltd faces challenges common to microcap companies, including limited institutional interest and higher volatility. The sector itself is subject to cyclical demand and capital intensity, which can exacerbate financial pressures during downturns. Investors should weigh these sector-specific risks alongside company fundamentals when making decisions.
Summary of Key Metrics as of 09 February 2026
- Mojo Score: 9.0 (Strong Sell Grade)
- Operating losses and negative ROCE
- Interest expense growth of 65.74% over nine months
- Profit before tax (excluding other income) down 53.4% quarterly
- Net profit after tax down 51.1% quarterly
- Stock returns: 1Y +9.18%, 3M -15.40%, YTD -6.55%
- Domestic mutual funds hold 0% stake
In conclusion, Gujarat Apollo Industries Ltd’s Strong Sell rating reflects significant concerns across quality, valuation, financial trends, and technical outlook. Investors should approach this stock with caution and prioritise thorough due diligence before making investment decisions.
Unlock special upgrade rates for a limited period. Start Saving Now →
