Current Rating and Its Significance
MarketsMOJO assigns Manomay Tex India Ltd a 'Sell' rating, indicating a cautious stance towards the stock at present. This rating suggests that investors should consider reducing exposure or avoiding new purchases, based on a detailed evaluation of the company’s quality, valuation, financial trends, and technical outlook. The rating was last updated on 04 February 2026, reflecting a reassessment of the company’s prospects. Yet, it is crucial to understand that the analysis below is grounded in the most recent data available as of 27 February 2026, ensuring an up-to-date perspective on the stock’s performance and fundamentals.
Quality Assessment: Below Average Fundamentals
As of 27 February 2026, Manomay Tex India Ltd exhibits below average quality metrics. The company’s long-term fundamental strength remains weak, with a compounded annual growth rate (CAGR) in net sales of -2.52% over the past five years. This negative growth trend signals challenges in expanding its core business operations. Additionally, the company’s ability to service debt is constrained, as reflected by a high Debt to EBITDA ratio of 4.25 times. Such leverage levels increase financial risk, particularly in a sector as competitive as garments and apparels. The latest quarterly results for December 2025 further underscore this concern, with profit before tax (excluding other income) falling by 23.11% to ₹5.89 crores, indicating pressure on profitability.
Valuation: Attractive but Reflective of Risks
Despite the quality concerns, the valuation grade for Manomay Tex India Ltd is currently attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings and asset base. Investors often find such valuations appealing when seeking potential turnaround opportunities or entry points in microcap stocks. However, the attractive valuation must be weighed against the company’s fundamental weaknesses and financial risks. The microcap status of the company also implies higher volatility and liquidity considerations, which investors should factor into their decision-making process.
Financial Trend: Flat Performance Amidst Challenges
The financial trend for Manomay Tex India Ltd is assessed as flat as of 27 February 2026. While the company has shown some positive returns over the medium term—such as a 34.37% gain over six months and a 37.16% increase over the past year—recent shorter-term performance has been less encouraging. The stock declined by 3.11% over the past month and 12.96% over three months, reflecting some volatility and investor caution. Year-to-date returns stand at a modest 9.44%. The flat financial grade indicates that while the company is not in a clear downtrend, it is also not demonstrating robust growth or improvement in key financial metrics.
Technical Outlook: Mildly Bullish but Cautious
From a technical perspective, the stock holds a mildly bullish grade. This suggests that recent price movements and chart patterns show some positive momentum, which could provide short-term trading opportunities. However, the technical strength is not strong enough to offset the fundamental and financial concerns. The stock’s one-day change of -1.34% and one-week decline of -1.05% indicate some near-term selling pressure. Investors relying on technical analysis should remain cautious and consider the broader fundamental context before making investment decisions.
Stock Returns and Market Performance
As of 27 February 2026, Manomay Tex India Ltd’s stock returns present a mixed picture. The stock has delivered a 37.16% gain over the past year, outperforming many peers in the garments and apparels sector. However, recent months have seen a pullback, with a 12.96% decline over three months and a 3.11% drop in the last month. This volatility highlights the stock’s sensitivity to market conditions and company-specific developments. The year-to-date return of 9.44% suggests some resilience, but investors should be mindful of the underlying risks.
Sector and Market Context
Operating within the garments and apparels sector, Manomay Tex India Ltd faces intense competition and margin pressures. The sector is influenced by changing consumer preferences, raw material costs, and global trade dynamics. As a microcap company, Manomay Tex India Ltd’s market capitalisation is relatively small, which can lead to higher price fluctuations and liquidity constraints. Investors should consider these sectoral and market factors alongside the company’s individual performance when evaluating the stock.
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What the 'Sell' Rating Means for Investors
The 'Sell' rating assigned to Manomay Tex India Ltd by MarketsMOJO serves as a cautionary signal for investors. It reflects a comprehensive assessment that the stock currently carries more downside risk than upside potential. Investors holding the stock may consider trimming their positions to manage risk, while prospective buyers should carefully evaluate whether the attractive valuation justifies the fundamental and financial challenges. The rating also underscores the importance of monitoring the company’s debt levels, profitability trends, and sector developments closely.
Conclusion: Balanced View on Manomay Tex India Ltd
In summary, Manomay Tex India Ltd’s current 'Sell' rating is grounded in its below average quality metrics, flat financial trend, and cautious technical outlook, despite an attractive valuation. The company’s weak long-term sales growth and high leverage present significant risks that investors must weigh against the stock’s recent returns and valuation appeal. As of 27 February 2026, the stock’s performance remains volatile, reflecting both sector pressures and company-specific challenges. Investors should approach this stock with prudence, considering their risk tolerance and investment horizon carefully.
Key Data Summary as of 27 February 2026
- Mojo Score: 44.0 (Sell Grade)
- Market Capitalisation: Microcap
- Debt to EBITDA Ratio: 4.25 times
- Net Sales CAGR (5 years): -2.52%
- Profit Before Tax (Dec 2025 quarter): ₹5.89 crores, down 23.11%
- Stock Returns: 1D -1.34%, 1W -1.05%, 1M -3.11%, 3M -12.96%, 6M +34.37%, YTD +9.44%, 1Y +37.16%
Investors are advised to keep abreast of quarterly results and sector trends to reassess the stock’s outlook as new data emerges.
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