Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Hindustan Foods Ltd indicates a neutral stance on the stock, suggesting that investors should neither aggressively buy nor sell at this juncture. This rating reflects a balanced view where the company demonstrates solid operational qualities but faces certain valuation and technical challenges that temper enthusiasm. The rating was revised on 17 Nov 2025, when the Mojo Score declined by 21 points from 71 to 50, signalling a shift from a 'Buy' to a 'Hold' recommendation.
Here’s How the Stock Looks Today
As of 05 January 2026, Hindustan Foods Ltd is classified as a smallcap player in the FMCG sector. The company’s current Mojo Score of 50.0 and a corresponding 'Hold' grade reflect a mixed but stable outlook. The stock has experienced modest price fluctuations recently, with a 1-day gain of 0.81% and a 1-week increase of 1.48%. However, over longer periods, the stock has shown slight declines: -0.67% over one month, -2.93% over three months, and -4.25% over six months. Year-to-date, the stock is down by 0.36%, and over the past year, it has marginally declined by 0.21%.
Quality Assessment
Hindustan Foods Ltd scores well on quality parameters, earning a 'good' grade. The company demonstrates high management efficiency, evidenced by a robust Return on Capital Employed (ROCE) of 15.10%. This metric indicates effective utilisation of capital to generate profits, a key indicator of operational strength. Additionally, the company has maintained positive results for four consecutive quarters, with operating cash flow for the year reaching a peak of ₹113.68 crores and quarterly PBDIT hitting ₹85.79 crores. These figures underscore consistent profitability and cash generation capabilities.
Valuation Perspective
From a valuation standpoint, Hindustan Foods Ltd is considered 'attractive'. The company’s ROCE of 12.5% combined with an Enterprise Value to Capital Employed ratio of 3.7 suggests the stock is trading at a discount relative to its peers’ historical valuations. Despite this, the Price/Earnings to Growth (PEG) ratio stands at 1.8, indicating moderate growth expectations priced into the stock. Investors may find this valuation appealing given the company’s healthy long-term growth rates, with net sales expanding at an annualised rate of 31.58% and operating profit growing at 34.47%.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend Analysis
The financial trend for Hindustan Foods Ltd is positive, reflecting steady growth and improving profitability. The company’s net sales and operating profit have grown at impressive annual rates of 31.58% and 34.47%, respectively. This growth trajectory is supported by strong operating cash flows and a healthy operating profit to interest coverage ratio of 4.27 times, indicating comfortable debt servicing capacity. Institutional investors hold a significant 20.2% stake, signalling confidence from well-resourced market participants who typically conduct thorough fundamental analysis.
Technical Outlook
Technically, the stock is currently rated as bearish. This assessment is consistent with the stock’s recent underperformance relative to the benchmark BSE500 index, having underperformed in each of the last three annual periods. Despite the company’s solid fundamentals and attractive valuation, the technical indicators suggest caution, as the stock has generated a negative return of -0.88% over the past year. This divergence between fundamentals and technicals is a key factor in the 'Hold' rating, advising investors to monitor price action closely before making significant moves.
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Investor Takeaway
For investors, the 'Hold' rating on Hindustan Foods Ltd suggests a cautious approach. The company’s strong quality metrics and attractive valuation provide a solid foundation, but the bearish technical signals and recent underperformance relative to the benchmark advise prudence. Investors should consider the stock as a stable holding rather than an immediate buy opportunity, monitoring future developments in both market sentiment and company performance.
Summary of Key Metrics as of 05 January 2026
- Mojo Score: 50.0 (Hold)
- ROCE: 15.10%
- Net Sales Growth (Annualised): 31.58%
- Operating Profit Growth (Annualised): 34.47%
- Operating Cash Flow (Yearly): ₹113.68 crores
- Operating Profit to Interest Coverage (Quarterly): 4.27 times
- PBDIT (Quarterly): ₹85.79 crores
- Enterprise Value to Capital Employed: 3.7
- PEG Ratio: 1.8
- Institutional Holdings: 20.2%
- 1 Year Stock Return: -0.21%
- Benchmark Underperformance: Consistent over last 3 years
In conclusion, Hindustan Foods Ltd’s current 'Hold' rating reflects a balanced view of its operational strengths and market challenges. Investors should weigh the company’s solid fundamentals against the technical caution signals and recent price performance when considering their portfolio strategy.
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