Current Rating and Its Significance
The 'Sell' rating assigned to Honeywell Automation India Ltd indicates a cautious stance for investors considering this stock. This recommendation suggests that the stock is expected to underperform relative to the broader market or its sector peers in the near to medium term. Investors should carefully evaluate the underlying factors contributing to this rating before making investment decisions.
How the Stock Looks Today: An Overview of Fundamentals and Performance
As of 28 December 2025, Honeywell Automation India Ltd exhibits several challenges across key performance indicators. The company's Mojo Score stands at 30.0, reflecting a significant decline from its previous score of 51. This score underpins the 'Sell' grade and highlights concerns in multiple areas including valuation, financial trends, and technical outlook.
Stock returns have been notably weak, with the latest data showing a 1-year return of -22.04%. The stock has also underperformed the BSE500 index over the past three years, one year, and three months, signalling sustained underperformance relative to the broader market. Recent price movements continue this trend, with a 1-day decline of -0.59% and a 1-month drop of -7.63%.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Quality Assessment
The quality grade for Honeywell Automation India Ltd is classified as average. This reflects a middling performance in operational efficiency and profitability metrics. Notably, the company’s operating profit has declined at an annualised rate of -0.84% over the last five years, indicating challenges in sustaining growth. Additionally, the return on equity (ROE) stands at 12.3%, which, while positive, does not strongly differentiate the company within its sector.
Valuation Considerations
Valuation is a critical factor influencing the current rating. The stock is considered very expensive, trading at a price-to-book (P/B) ratio of 7. This elevated valuation suggests that the market price is high relative to the company’s net asset value, which may limit upside potential. Despite this, the stock is trading at a discount compared to its peers’ average historical valuations, indicating some relative value within the sector. However, the high absolute valuation remains a concern for investors seeking value opportunities.
Financial Trend and Profitability
The financial grade is flat, signalling stagnation in key financial metrics. The latest results for September 2025 were largely unchanged, reflecting a lack of momentum in revenue or profit growth. Over the past year, profits have declined by -2.2%, compounding concerns about the company’s growth trajectory. This flat financial trend, combined with weak returns, suggests limited near-term catalysts for improvement.
Technical Outlook
From a technical perspective, the stock is graded bearish. This assessment is supported by recent price declines and negative momentum indicators. The stock’s performance over the last six months shows a decline of -14.79%, reinforcing the downward trend. Technical weakness often reflects investor sentiment and can influence short-term price movements, adding to the cautious stance on the stock.
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Implications for Investors
For investors, the 'Sell' rating on Honeywell Automation India Ltd signals caution. The combination of average quality, very expensive valuation, flat financial trends, and bearish technicals suggests limited upside and potential downside risk. Investors holding the stock may consider reviewing their positions in light of these factors, while prospective buyers should weigh the risks carefully against their investment objectives.
It is important to note that while the rating was updated on 02 September 2025, all financial data and performance metrics referenced here are current as of 28 December 2025. This ensures that the analysis reflects the most recent company and market conditions, providing a relevant basis for investment decisions.
Sector and Market Context
Honeywell Automation India Ltd operates within the industrial manufacturing sector, a space often sensitive to economic cycles and capital expenditure trends. The midcap status of the company places it in a category where growth prospects can be volatile and valuation swings more pronounced. The stock’s underperformance relative to the BSE500 index over multiple time frames highlights the challenges it faces in competing effectively within its sector and the broader market.
Summary
In summary, Honeywell Automation India Ltd’s current 'Sell' rating by MarketsMOJO is underpinned by a comprehensive evaluation of quality, valuation, financial trends, and technical factors. The stock’s high valuation, lack of growth momentum, and negative price trends collectively justify a cautious approach. Investors should consider these elements carefully when assessing the stock’s suitability for their portfolios.
Looking Ahead
Going forward, key indicators to monitor include any improvement in operating profit growth, shifts in valuation multiples, and technical signals that may indicate a reversal of the current downtrend. Additionally, sector dynamics and broader economic conditions will play a significant role in shaping the company’s prospects. Staying informed with up-to-date analysis will be crucial for investors navigating this stock.
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