Ingersoll-Rand (India) Ltd is Rated Sell

Current Rating and Its Significance

The 'Sell' rating assigned to Ingersoll-Rand (India) Ltd indicates a cautious stance for investors considering this stock at present. This recommendation suggests that the stock may underperform relative to the broader market or its sector peers in the near term. Investors are advised to carefully evaluate the underlying factors contributing to this rating before making investment decisions.

Quality Assessment

As of 01 February 2026, Ingersoll-Rand (India) Ltd maintains an excellent quality grade. This reflects the company’s robust operational fundamentals, including strong return on equity (ROE) and consistent profit growth. The latest data shows a ROE of 40.7%, signalling efficient utilisation of shareholder capital and a solid earnings generation capacity. Despite this, the company’s debtors turnover ratio for the half-year period remains relatively low at 4.43 times, indicating some challenges in receivables management that could impact cash flow efficiency.

Valuation Considerations

Valuation remains a critical factor in the current rating. The stock is classified as very expensive with a price-to-book (P/B) ratio of 16.3, which is significantly higher than typical benchmarks. While the stock trades at a discount compared to its peers’ historical valuations, the elevated P/B ratio suggests that the market has priced in high expectations for future growth. The price-earnings-to-growth (PEG) ratio stands at 4.1, indicating that earnings growth may not sufficiently justify the current price level. This expensive valuation reduces the margin of safety for investors and contributes to the cautious 'Sell' stance.

Financial Trend Analysis

The financial trend for Ingersoll-Rand (India) Ltd is currently flat. The company reported flat results in the September 2025 half-year period, with profits rising by 9.7% over the past year. However, this profit growth has not translated into positive stock returns. As of 01 February 2026, the stock has delivered a negative return of -11.06% over the last year, underperforming the broader BSE500 index, which has generated a 7.95% return in the same period. This divergence between earnings growth and stock performance highlights investor concerns about sustainability and future prospects.

Technical Outlook

The technical grade for the stock is bearish, reflecting recent price trends and market sentiment. Over the past six months, the stock has declined by 11.96%, with a notable 13.06% drop over the last three months. The one-month performance also shows a decline of 4.66%, despite a modest one-week gain of 5.50%. The one-day change on 01 February 2026 was a slight decrease of 0.27%. These technical indicators suggest downward momentum, which may deter short-term traders and add to the overall cautious outlook.

Performance Summary

Ingersoll-Rand (India) Ltd’s stock performance over various time frames as of 01 February 2026 is as follows: a one-day decline of 0.27%, a one-week gain of 5.50%, a one-month loss of 4.66%, a three-month loss of 13.06%, a six-month loss of 11.96%, a year-to-date loss of 5.38%, and a one-year loss of 11.06%. This pattern of volatility and overall negative returns contrasts with the broader market’s positive trajectory, underscoring the challenges faced by the company in regaining investor confidence.

Sector and Market Context

Operating within the Compressors, Pumps & Diesel Engines sector, Ingersoll-Rand (India) Ltd is classified as a small-cap company. The sector has experienced mixed performance amid evolving industrial demand and supply chain dynamics. While some peers have benefited from market tailwinds, Ingersoll-Rand’s valuation and technical trends suggest it is currently lagging behind. Investors should consider sector-specific risks alongside company fundamentals when evaluating this stock.

What This Rating Means for Investors

The 'Sell' rating on Ingersoll-Rand (India) Ltd advises investors to exercise caution. It suggests that the stock may face headwinds in the near term due to its expensive valuation, flat financial trends, and bearish technical outlook despite strong quality metrics. Investors holding the stock might consider reviewing their positions, while prospective buyers should weigh the risks carefully against potential rewards.

Key Takeaways for Investment Decisions

Investors should note that while the company demonstrates excellent quality through its high ROE and profit growth, the very expensive valuation and subdued financial momentum limit upside potential. The bearish technical signals further reinforce the need for prudence. Monitoring upcoming quarterly results and sector developments will be crucial to reassessing the stock’s outlook in the coming months.

Summary

Ingersoll-Rand (India) Ltd’s current 'Sell' rating by MarketsMOJO, updated on 18 December 2025, reflects a comprehensive evaluation of quality, valuation, financial trends, and technical factors as of 01 February 2026. While the company’s operational quality remains strong, valuation concerns and recent price performance weigh heavily on the recommendation. Investors should consider these factors carefully in the context of their portfolio strategy and risk tolerance.

About MarketsMOJO Ratings

MarketsMOJO’s ratings integrate multiple parameters to provide a holistic view of a stock’s investment potential. The Mojo Score of 44.0 for Ingersoll-Rand (India) Ltd places it in the 'Sell' category, signalling that the stock currently exhibits more risks than rewards based on our proprietary analysis framework.

Looking Ahead

Given the current market environment and company-specific factors, investors should stay alert to any changes in fundamentals or technical trends that could influence the stock’s trajectory. Regularly reviewing updated ratings and financial disclosures will help in making informed decisions.

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