Indiabulls Limited is Rated Hold

Current Rating Overview and Context

On 08 December 2025, MarketsMOJO adjusted Indiabulls Limited’s rating from 'Buy' to 'Hold', reflecting a change in the company’s overall assessment. The Mojo Score, a composite indicator of various performance parameters, declined by 7 points from 75 to 68. This score places Indiabulls in the 'Hold' category, signalling a cautious stance for investors who currently hold the stock or are considering entry. The 'Hold' rating suggests that while the stock may not offer significant upside in the near term, it is not expected to deteriorate substantially either, making it suitable for investors with a moderate risk appetite.

Here’s How Indiabulls Looks Today: Quality Assessment

As of 25 December 2025, Indiabulls Limited’s quality grade is assessed as average. The company demonstrates a mixed operational profile. On one hand, it has shown healthy long-term growth in operating profit, which has increased at an annual rate of 70.61% over recent years. This robust growth in core earnings is a positive indicator of operational efficiency and business expansion.

However, the company’s ability to service its debt remains a concern. The Debt to EBITDA ratio stands at -1.00 times, indicating a high leverage position that could constrain financial flexibility. Additionally, the average Return on Equity (ROE) is a modest 0.16%, signalling limited profitability generated per unit of shareholder funds. This low ROE suggests that the company is not currently delivering strong returns to equity investors, which is a key consideration in the quality evaluation.

Valuation: A Premium Price Tag

Indiabulls is currently rated as very expensive in terms of valuation. The stock trades at a Price to Book (P/B) ratio of 1.4, which is above the average historical valuations of its peers in the diversified commercial services sector. This premium valuation reflects market expectations of future growth but also implies limited margin for error.

Despite the stock’s price premium, the company’s Price/Earnings to Growth (PEG) ratio stands at 2.1, indicating that earnings growth is not fully aligned with the elevated valuation. Over the past year, the stock has delivered a return of -1.97%, while profits have surged by 164.6%. This divergence suggests that the market may be pricing in risks or uncertainties that temper enthusiasm despite strong profit growth.

Financial Trend: Outstanding Profit Growth Amidst Challenges

The financial trend for Indiabulls Limited is rated outstanding, driven primarily by exceptional growth in operating profit and net profit after tax (PAT). The latest quarterly results ending September 2025 highlight a remarkable 407.68% increase in operating profit, underscoring the company’s ability to expand earnings significantly.

Moreover, PAT for the quarter reached ₹74.60 crores, representing a staggering 534.7% growth compared to the previous four-quarter average. This surge in profitability is complemented by a strong operating profit to interest coverage ratio of 7.30 times, indicating that the company comfortably covers its interest expenses from operating earnings.

Additionally, the debtors turnover ratio for the half-year period stands at 8.47 times, reflecting efficient management of receivables and cash flow. These financial trends demonstrate that despite some leverage concerns, Indiabulls is currently generating strong earnings momentum and improving operational efficiency.

Technical Outlook: Mildly Bullish Signals

From a technical perspective, Indiabulls Limited exhibits a mildly bullish grade. The stock’s recent price movements show some positive momentum, with a one-day gain of 4.46% as of 25 December 2025. However, short- and medium-term returns have been mixed, with declines of 5.86% over one week and 17.56% over one month, indicating volatility and some selling pressure.

Over the longer term, the stock’s year-to-date return is a modest +3.15%, while the one-year return is slightly negative at -1.97%. These figures suggest that while there is some technical support for the stock, investors should be cautious and monitor price action closely for confirmation of sustained upward trends.

What the Hold Rating Means for Investors

The 'Hold' rating assigned to Indiabulls Limited indicates a balanced view of the stock’s prospects. Investors are advised to maintain their current positions without initiating new purchases or sales based solely on this rating. The company’s outstanding financial trend and mild technical bullishness provide some confidence in its near-term earnings potential.

However, the average quality grade and very expensive valuation caution against aggressive accumulation. The high leverage and modest profitability metrics suggest that risks remain, particularly if market conditions deteriorate or if the company faces operational setbacks.

For investors, this means that Indiabulls Limited may be suitable as a portfolio holding for those seeking exposure to a company with strong profit growth but who are comfortable with moderate valuation risk and some financial leverage. Close monitoring of quarterly results and market developments is recommended to reassess the stock’s outlook as new data emerges.

Summary

In summary, Indiabulls Limited’s current 'Hold' rating by MarketsMOJO, updated on 08 December 2025, reflects a nuanced assessment of its business fundamentals, valuation, financial trends, and technical signals as of 25 December 2025. The company’s outstanding profit growth contrasts with average quality and expensive valuation, while technical indicators suggest mild bullishness. Investors should weigh these factors carefully when considering their exposure to this microcap stock in the diversified commercial services sector.

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