Understanding the Current Rating
The Strong Sell rating assigned to Madhusudan Industries Ltd indicates a cautious stance for investors, signalling significant concerns across multiple evaluation parameters. This rating is derived from a comprehensive assessment of the company’s quality, valuation, financial trend, and technical outlook. It suggests that the stock currently exhibits weak fundamentals and unfavourable market signals, which may pose considerable risks for shareholders and potential investors alike.
Here’s How the Stock Looks Today
As of 26 December 2025, Madhusudan Industries Ltd remains a microcap player in the edible oil sector, with a Mojo Score of 3.0, categorised firmly within the Strong Sell grade. The stock has experienced a sharp decline in recent periods, with a one-day drop of -5.41%, a one-month fall of -10.63%, and a year-to-date return of -42.02%. Over the past year, the stock has underperformed significantly, delivering a negative return of -42.02%, which is well below broader market indices such as the BSE500.
Quality Assessment
The company’s quality grade is below average, reflecting weak operational and profitability metrics. Over the last five years, Madhusudan Industries has recorded a negative compound annual growth rate (CAGR) of -7.86% in operating profits, signalling deteriorating core business performance. The company’s ability to service debt is notably poor, with an average EBIT to interest ratio of -0.37, indicating that earnings before interest and tax are insufficient to cover interest expenses. Furthermore, the average return on capital employed (ROCE) stands at a low 2.51%, highlighting limited profitability generated from the company’s total capital base.
Valuation Considerations
From a valuation perspective, the stock is considered risky. The latest data shows negative EBITDA, which is a critical red flag for investors as it points to operational losses before accounting for depreciation and amortisation. The stock’s current trading multiples are unfavourable compared to its historical averages, suggesting that the market perceives heightened risk and uncertainty around the company’s future earnings potential. This elevated risk profile is reflected in the Strong Sell rating, advising investors to exercise caution.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Profitability
The financial trend for Madhusudan Industries Ltd is negative, with recent quarterly results underscoring the challenges faced by the company. The September 2025 quarter reported a net loss (PAT) of ₹0.68 crore, representing a steep decline of 128.6% compared to the previous four-quarter average. The half-year ROCE has also plunged to -7.75%, the lowest recorded, indicating that the company is currently destroying value rather than creating it. These figures highlight ongoing operational difficulties and a lack of financial momentum.
Technical Outlook
Technically, the stock is bearish. The downward momentum is evident from the consistent negative returns across multiple time frames: -7.68% over one week, -17.13% over three months, and -13.16% over six months. This persistent decline suggests weak investor sentiment and a lack of buying interest. The technical grade assigned is bearish, reinforcing the Strong Sell rating and signalling that the stock is unlikely to experience a near-term recovery without significant changes in fundamentals or market conditions.
Comparative Performance
When benchmarked against broader market indices such as the BSE500, Madhusudan Industries Ltd has underperformed over the last three years, one year, and three months. This underperformance, combined with deteriorating financial metrics and negative technical signals, paints a challenging picture for investors considering exposure to this stock.
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What This Rating Means for Investors
The Strong Sell rating for Madhusudan Industries Ltd serves as a clear cautionary signal. Investors should be aware that the company currently exhibits weak operational performance, poor profitability, and unfavourable market sentiment. The valuation risks and negative financial trends suggest that the stock may continue to face downward pressure in the near term. For risk-averse investors, this rating advises avoiding new positions or considering exit strategies if already invested.
However, it is important to note that market conditions and company fundamentals can evolve. Investors who favour a contrarian approach might monitor the stock for signs of operational turnaround or valuation improvement before reconsidering their stance.
Summary
In summary, Madhusudan Industries Ltd’s current Strong Sell rating, last updated on 29 May 2024, reflects a comprehensive evaluation of its below-average quality, risky valuation, negative financial trend, and bearish technical outlook. As of 26 December 2025, the company continues to face significant challenges, with deteriorating profitability and sustained stock price declines. Investors should carefully weigh these factors when making investment decisions related to this stock.
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