International Combustion (India) Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO currently assigns a 'Sell' rating to International Combustion (India) Ltd, reflecting a cautious stance on the stock. This rating suggests that investors should consider reducing exposure or avoiding new purchases at present, given the company’s financial and technical outlook. The rating was revised on 04 Nov 2025, moving from a 'Strong Sell' to a 'Sell', indicating a slight improvement but still signalling concerns about the stock’s near-term prospects.

Here’s How the Stock Looks Today

As of 05 January 2026, International Combustion (India) Ltd exhibits a Mojo Score of 37.0, which corresponds to the 'Sell' grade. This score reflects a composite assessment of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall recommendation and helps investors understand the rationale behind the current rating.

Quality Assessment

The company’s quality grade is classified as 'average'. This indicates that while International Combustion maintains a stable operational base, it does not demonstrate strong competitive advantages or superior profitability metrics. The return on capital employed (ROCE) for the half-year ended September 2025 stands at a modest 9.34%, which is relatively low for the industrial manufacturing sector. Additionally, the quarterly profit after tax (PAT) has declined by 42.9% to ₹0.12 crore, signalling challenges in maintaining earnings momentum.

Valuation Perspective

From a valuation standpoint, the stock appears attractive. This suggests that the current market price may offer some value relative to the company’s earnings and asset base. However, attractive valuation alone is insufficient to offset concerns arising from other parameters. Investors should weigh this factor carefully, considering the broader financial and technical context before making investment decisions.

Financial Trend Analysis

The financial trend for International Combustion is described as 'flat'. This reflects a lack of significant growth or deterioration in key financial metrics over recent periods. The company’s performance has been largely stagnant, with no clear upward trajectory in profitability or revenue growth. This flat trend contributes to the cautious rating, as investors typically prefer companies demonstrating consistent financial improvement.

Technical Outlook

Technically, the stock is rated as 'bearish'. This is supported by recent price movements and momentum indicators. Over the past three months, the stock has declined by 24.77%, and over six months by 28.38%. The one-year return is negative at -35.45%, significantly underperforming the broader BSE500 index, which has delivered a positive 5.35% return over the same period. Such technical weakness suggests limited near-term upside and increased risk of further declines.

Stock Performance and Market Context

Currently, the stock has shown mixed short-term performance. It gained 1.03% on the latest trading day and has risen 3.31% year-to-date. However, these gains are overshadowed by significant declines over longer periods, including a 24.77% drop in the past three months and a 35.45% fall over the last year. This underperformance is notable given that the broader market, represented by the BSE500, has generated positive returns of 5.35% over the same one-year timeframe.

Operational and Profitability Challenges

The company’s recent quarterly results indicate operational headwinds. The PAT of ₹0.12 crore for the quarter ended September 2025 represents a sharp 42.9% decline compared to the previous period. Such a drop in profitability raises concerns about the company’s ability to sustain earnings and generate shareholder value. The subdued ROCE further emphasises the limited efficiency in capital utilisation, which is a critical factor for industrial manufacturing firms.

Implications for Investors

For investors, the 'Sell' rating implies a recommendation to consider reducing holdings or avoiding new investments in International Combustion (India) Ltd at this time. The combination of average quality, attractive valuation, flat financial trends, and bearish technical signals suggests that the stock faces multiple challenges that could limit upside potential. While the valuation may appear appealing, the lack of financial growth and technical weakness warrant caution.

Outlook and Considerations

Investors should monitor upcoming quarterly results and any strategic initiatives by the company that could improve profitability and operational efficiency. Additionally, broader sectoral trends in industrial manufacturing and macroeconomic factors will influence the stock’s trajectory. Until there is clear evidence of financial improvement and technical recovery, maintaining a cautious stance is prudent.

Summary

In summary, International Combustion (India) Ltd’s current 'Sell' rating by MarketsMOJO reflects a comprehensive evaluation of its present fundamentals and market performance as of 05 January 2026. While the valuation remains attractive, the company’s average quality, flat financial trend, and bearish technical outlook combine to suggest limited near-term upside and elevated risk. Investors should approach the stock with caution and consider alternative opportunities until clearer signs of recovery emerge.

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