Current Rating Overview
MarketsMOJO’s Strong Sell rating for Ideaforge Technology Ltd indicates a cautious stance for investors, signalling significant concerns across multiple dimensions of the company’s performance. The rating was revised on 29 October 2024, when the Mojo Score dropped sharply from 36 to 1, reflecting a deterioration in the company’s outlook. Despite this date marking the rating change, all subsequent data and analysis are based on the latest available information as of 13 February 2026, ensuring that investors understand the stock’s present-day risks and opportunities.
Quality Assessment
As of 13 February 2026, Ideaforge Technology Ltd’s quality grade remains below average. The company has struggled with sustained operating losses, which have undermined its long-term fundamental strength. Its ability to service debt is notably weak, with an average EBIT to interest ratio of -23.07, signalling that earnings before interest and tax are insufficient to cover interest expenses. This poor coverage ratio highlights financial stress and raises concerns about the company’s solvency and operational efficiency.
Furthermore, the company has reported negative returns on capital employed (ROCE), a key indicator of how effectively it is using its capital to generate profits. The persistent losses and weak profitability metrics suggest that Ideaforge is facing structural challenges in its business model or market positioning.
Valuation Considerations
The valuation grade for Ideaforge Technology Ltd is classified as risky. Current market pricing does not appear to offer a margin of safety for investors, given the company’s deteriorating financial health. The stock’s historical valuations have been more favourable, but recent trends have pushed it into a territory where downside risks outweigh potential gains.
Despite the stock generating a modest 2.5% return over the past year as of 13 February 2026, this performance masks a deeper issue: profits have plunged by 291.4% over the same period. This disconnect between stock price movement and underlying earnings deterioration suggests that the market may be underestimating the risks or that speculative factors are influencing the share price.
Financial Trend Analysis
The financial trend for Ideaforge Technology Ltd is very negative. The company has declared losses for six consecutive quarters, including the most recent quarter ending September 2024. The latest quarterly results show a pre-tax loss (PBT less other income) of ₹38.54 crores, which represents a 43.7% decline compared to the previous four-quarter average. Similarly, the net profit after tax (PAT) for the quarter was a loss of ₹33.85 crores, down 45.7% from the prior average.
Net sales over the nine months leading to the current date have also contracted by 39.61%, signalling weakening demand or operational challenges. Negative EBITDA further compounds the risk profile, indicating that the company is not generating sufficient earnings to cover operating costs before accounting for interest, taxes, depreciation, and amortisation.
Technical Outlook
From a technical perspective, the stock is rated bearish. Recent price movements reflect investor caution, with the stock declining 2.21% on the day of analysis and showing negative returns over one week (-3.25%), one month (-11.90%), three months (-10.81%), six months (-10.31%), and year-to-date (-12.11%). These trends suggest sustained selling pressure and a lack of positive momentum.
Additionally, domestic mutual funds hold a relatively small stake of just 1.53% in Ideaforge Technology Ltd. Given their capacity for in-depth research and due diligence, this limited exposure may indicate a lack of confidence in the company’s near-term prospects or valuation at current levels.
Implications for Investors
For investors, the Strong Sell rating implies that Ideaforge Technology Ltd currently presents significant risks that outweigh potential rewards. The combination of weak quality metrics, risky valuation, deteriorating financial trends, and bearish technical signals suggests that the stock is not a favourable investment at this time.
Investors should be cautious and consider the company’s ongoing losses, poor debt servicing ability, and declining sales before committing capital. The rating serves as a warning to prioritise capital preservation and seek opportunities with stronger fundamentals and more positive outlooks.
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Summary of Key Metrics as of 13 February 2026
To summarise, the key financial and market metrics for Ideaforge Technology Ltd are as follows:
- Mojo Score: 1.0 (Strong Sell)
- Quality Grade: Below Average
- Valuation Grade: Risky
- Financial Grade: Very Negative
- Technical Grade: Bearish
- Market Cap: Smallcap
- Stock Returns: 1 Day -2.21%, 1 Week -3.25%, 1 Month -11.90%, 3 Months -10.81%, 6 Months -10.31%, YTD -12.11%, 1 Year +2.50%
- Operating Losses: Persistent over six quarters
- EBIT to Interest Coverage Ratio: -23.07
- Net Sales (9M): ₹85.09 crores, down 39.61%
- Pre-Tax Loss (Latest Quarter): ₹38.54 crores, down 43.7%
- Net Profit After Tax (Latest Quarter): -₹33.85 crores, down 45.7%
- Domestic Mutual Fund Holding: 1.53%
These figures collectively reinforce the rationale behind the Strong Sell rating and highlight the challenges Ideaforge Technology Ltd faces in regaining investor confidence and financial stability.
Looking Ahead
While the current outlook remains bleak, investors should monitor any strategic initiatives or operational improvements that the company may announce in the future. Turnaround efforts, cost rationalisation, or new contracts in the aerospace and defence sector could potentially alter the company’s trajectory. Until such developments materialise and translate into improved financial performance, the Strong Sell rating remains a prudent guide for risk-averse investors.
Conclusion
In conclusion, Ideaforge Technology Ltd’s Strong Sell rating by MarketsMOJO reflects a comprehensive assessment of its weak quality, risky valuation, deteriorating financial trends, and bearish technical indicators as of 13 February 2026. Investors should approach this stock with caution, prioritising thorough due diligence and risk management in their portfolio decisions.
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