Lakhotia Polyesters (India) Ltd is Rated Sell

Understanding the Current Rating

The 'Sell' rating assigned to Lakhotia Polyesters (India) Ltd indicates a cautious stance for investors. 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. It is important to note that this rating was revised from a 'Strong Sell' to a 'Sell' on 28 August 2025, reflecting a slight improvement in the company’s outlook. Nevertheless, the current rating advises investors to consider the risks involved before committing capital.

Here’s How the Stock Looks Today

As of 19 January 2026, Lakhotia Polyesters operates within the Garments & Apparels sector and is classified as a microcap company. The stock’s Mojo Score currently stands at 33.0, which corresponds to the 'Sell' grade. This score represents a modest improvement from the previous 29 points but remains below average, signalling ongoing challenges.

Quality Assessment

The company’s quality grade is rated below average. This reflects operational difficulties, including sustained operating losses and weak long-term fundamental strength. The firm’s ability to service its debt is limited, as evidenced by a Debt to EBITDA ratio of -1.00 times, indicating negative earnings before interest, taxes, depreciation, and amortisation. Additionally, the Return on Capital Employed (ROCE) averages a mere 0.76%, highlighting low profitability relative to the capital invested. These factors collectively suggest that the company struggles to generate consistent returns for shareholders.

Valuation Considerations

From a valuation standpoint, Lakhotia Polyesters is considered risky. The stock trades at levels that are unfavourable compared to its historical averages, reflecting investor concerns about the company’s financial health and growth prospects. Despite this, the stock has delivered a notable 65.17% return over the past year as of 19 January 2026. This performance is somewhat paradoxical given the company’s underlying challenges, but it is important to note that profits have surged by 532.4% during the same period, which may have contributed to the stock’s price appreciation. The PEG ratio stands at zero, indicating that the price-to-earnings growth relationship is not favourable or is difficult to interpret due to volatile earnings.

Financial Trend Analysis

The financial grade for Lakhotia Polyesters is flat, signalling stagnation rather than growth or decline. The latest quarterly results show net sales for the nine months ended September 2025 at ₹19.53 crores, representing a contraction of 33.59% compared to previous periods. Non-operating income accounts for 136.17% of profit before tax, suggesting that core business operations are underperforming and that profits are being supplemented by other income sources. Earnings per share (EPS) for the quarter is at a low ₹0.57, underscoring limited profitability. These figures indicate that while the company has managed to avoid further deterioration, it has yet to demonstrate a clear upward trajectory in its financial performance.

Technical Outlook

Technically, the stock is mildly bullish. Despite recent volatility, including a 1-day decline of 1.46% and a 1-week drop of 6.20%, the stock has shown resilience with a 6-month gain of 83.18%. However, the 3-month performance is weak, down 54.72%, reflecting short-term pressures. Year-to-date, the stock has declined by 5.07%. This mixed technical picture suggests that while there may be some buying interest, caution remains warranted given the stock’s erratic price movements.

What This Means for Investors

For investors, the 'Sell' rating on Lakhotia Polyesters (India) Ltd serves as a signal to approach the stock with caution. The company’s below-average quality, risky valuation, flat financial trend, and mixed technical signals imply that the stock may not be suitable for those seeking stable or growth-oriented investments at this time. Investors should carefully weigh the risks associated with the company’s operational challenges and market volatility before considering any position.

Sector and Market Context

Operating in the Garments & Apparels sector, Lakhotia Polyesters faces competitive pressures and market uncertainties that have impacted its financial results. The microcap status of the company also means liquidity and market depth may be limited, adding to the investment risk. Compared to broader market indices and sector benchmarks, the company’s performance and fundamentals lag behind, reinforcing the cautious stance.

Summary and Outlook

In summary, Lakhotia Polyesters (India) Ltd’s current 'Sell' rating reflects a nuanced picture. While there has been some improvement from a 'Strong Sell' rating, the company continues to face significant operational and financial headwinds. Investors should note that the rating was last updated on 28 August 2025, but the data and analysis presented here are current as of 19 January 2026, ensuring an accurate reflection of the company’s present condition.

Given the below-average quality, risky valuation, flat financial trend, and mixed technical signals, the stock remains a cautious proposition. Investors seeking exposure to the Garments & Apparels sector may wish to consider alternative opportunities with stronger fundamentals and clearer growth prospects. Those holding the stock should monitor quarterly results closely and reassess their positions in light of evolving market conditions.

Key Metrics at a Glance (As of 19 January 2026):

• Mojo Score: 33.0 (Sell)


• Market Capitalisation: Microcap


• Debt to EBITDA Ratio: -1.00 times


• Return on Capital Employed (avg): 0.76%


• Net Sales (9M Sep 2025): ₹19.53 crores (-33.59%)


• EPS (Quarterly): ₹0.57


• Stock Returns: 1 Year +65.17%, 6 Months +83.18%, 3 Months -54.72%

Investors should continue to monitor the company’s financial disclosures and market developments to make informed decisions aligned with their risk tolerance and investment objectives.

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