Manomay Tex India Ltd is Rated Sell by MarketsMOJO

Current Rating Overview

On 04 February 2026, MarketsMOJO assigned Manomay Tex India Ltd a 'Sell' rating, reflecting a decline in its overall Mojo Score from 58 to 44. This score adjustment signals a more cautious stance on the stock, based on a detailed evaluation of its quality, valuation, financial trends, and technical outlook. The 'Sell' rating suggests that investors should consider reducing exposure to this microcap garment and apparel company, given the prevailing challenges and risk factors.

How the Stock Looks Today: Quality Assessment

As of 16 February 2026, Manomay Tex India Ltd’s quality grade remains below average. The company has experienced a negative compound annual growth rate (CAGR) of -2.52% in net sales over the past five years, indicating a contraction in its core revenue base. This weak long-term fundamental strength raises concerns about the company’s ability to sustain growth and compete effectively in the garments and apparels sector.

Additionally, the company’s debt servicing capacity is limited, with a high Debt to EBITDA ratio of 4.25 times. This elevated leverage level increases financial risk, especially in a sector that can be sensitive to economic cycles and consumer demand fluctuations. Investors should be mindful that such financial strain could constrain the company’s operational flexibility and investment potential.

Valuation Perspective

Despite the challenges in quality, 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. For value-oriented investors, this could present an opportunity to acquire shares at a discount compared to peers or historical averages. However, the attractive valuation must be weighed against the company’s fundamental weaknesses and financial risks.

Financial Trend and Recent Performance

The financial grade for the company is flat, reflecting a lack of significant improvement or deterioration in recent quarters. The latest quarterly results for December 2025 show a decline in profit before tax excluding other income (PBT LESS OI) to ₹5.89 crores, down by 23.11%. This contraction in profitability highlights ongoing operational pressures and challenges in maintaining earnings momentum.

On the returns front, as of 16 February 2026, Manomay Tex India Ltd has delivered a 1-year return of +18.67%, with a notable 6-month return of +37.55%. The year-to-date return stands at +12.88%, while shorter-term returns show modest gains: +2.17% over one month and +1.54% over three months. The stock’s 1-day performance was negative at -0.93%, indicating some recent volatility. These mixed returns suggest that while the stock has shown some resilience, underlying fundamental concerns temper enthusiasm.

Technical Outlook

The technical grade is mildly bullish, indicating that the stock’s price action and momentum indicators show some positive signals. This mild bullishness may reflect short-term investor interest or technical support levels that could provide limited upside potential. However, technical strength alone is insufficient to offset the fundamental and financial challenges faced by the company.

Implications for Investors

The 'Sell' rating from MarketsMOJO for Manomay Tex India Ltd is a cautionary signal for investors. It reflects a comprehensive assessment that balances the company’s attractive valuation against its below-average quality, flat financial trends, and only mild technical support. Investors should carefully consider these factors in the context of their portfolio risk tolerance and investment horizon.

For those holding the stock, the current rating suggests evaluating the position and potentially reducing exposure, especially given the company’s weak long-term sales growth and profitability pressures. Prospective investors may wish to monitor the company closely for signs of fundamental improvement before initiating new positions.

Sector and Market Context

Manomay Tex India Ltd operates within the garments and apparels sector, a space characterised by intense competition, evolving consumer preferences, and sensitivity to economic cycles. Microcap companies in this sector often face challenges in scaling operations and maintaining profitability amid rising input costs and fluctuating demand.

Compared to broader market benchmarks, the stock’s recent returns have been mixed but generally positive over the medium term. However, the company’s weak fundamental profile and financial constraints suggest that it may struggle to outperform sector peers or broader indices sustainably.

Summary

In summary, Manomay Tex India Ltd’s current 'Sell' rating by MarketsMOJO, effective from 04 February 2026, is grounded in a thorough analysis of its quality, valuation, financial trends, and technical outlook as of 16 February 2026. While the stock’s valuation appears attractive and technical signals are mildly positive, the company’s below-average quality and flat financial performance warrant caution. Investors should carefully weigh these factors when considering their exposure to this microcap garment and apparel stock.

Looking Ahead

Investors interested in Manomay Tex India Ltd should monitor upcoming quarterly results and any strategic initiatives aimed at improving sales growth and profitability. Additionally, changes in debt levels and operational efficiency will be key indicators to watch. Until such improvements materialise, the 'Sell' rating advises prudence and a defensive approach.

Note on Data and Ratings

It is important to reiterate that while the rating was updated on 04 February 2026, all financial metrics, returns, and fundamental data referenced here are current as of 16 February 2026. This ensures that investors receive the most up-to-date and actionable information when making decisions.

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