Manugraph India Ltd Upgraded to Sell as Financial and Valuation Metrics Improve

Financial Performance: From Very Positive to Positive

The upgrade in Manugraph India’s financial grade from very positive to positive is underpinned by robust quarterly results for December 2025. Net sales surged to ₹17.69 crores, marking an impressive growth rate of 175.98% compared to the previous quarter. This surge in revenue is complemented by a higher profit after tax (PAT) of ₹4.89 crores over the nine-month period, signalling improved profitability.

Inventory management has also strengthened, with the inventory turnover ratio reaching a six-month high of 2.33 times, indicating efficient stock utilisation. Additionally, cash and cash equivalents stood at ₹5.64 crores, the highest in recent periods, enhancing the company’s liquidity position.

However, the financial score has declined slightly to 19 from 25 over the past three months, reflecting some caution despite the positive quarterly performance. The company’s long-term fundamentals remain weak, with an average return on equity (ROE) close to 0% and a modest five-year net sales growth rate of 13.42%. Furthermore, the EBIT to interest coverage ratio remains negative at -4.35, highlighting ongoing challenges in servicing debt.

Valuation: Shift from Expensive to Very Attractive

Manugraph India’s valuation grade has improved significantly, moving from expensive to very attractive. The stock currently trades at a price-to-earnings (PE) ratio of 13.39, well below many of its industry peers. Its price-to-book (P/B) value stands at 0.90, suggesting the stock is undervalued relative to its net asset value.

Enterprise value multiples also support this positive valuation outlook, with EV to EBIT at 10.00 and EV to EBITDA at 8.73, both indicating reasonable pricing given the company’s earnings before interest and taxes. The PEG ratio is exceptionally low at 0.11, signalling that the stock’s price growth has not kept pace with earnings growth, which rose by 121.8% over the past year.

Return on capital employed (ROCE) remains subdued at 0.66%, while ROE has improved to 6.72%, reflecting some enhancement in capital efficiency. Compared to peers such as Kokuyo Camlin and Linc, Manugraph India offers a more attractive valuation proposition, trading at a discount despite recent earnings growth.

Technical Indicators: From Bearish to Mildly Bearish

The technical trend for Manugraph India has improved modestly, shifting from bearish to mildly bearish. Weekly MACD readings have turned mildly bullish, although monthly MACD remains bearish, indicating mixed momentum across different time frames. The Relative Strength Index (RSI) shows no clear signal on both weekly and monthly charts, suggesting a neutral momentum stance.

Bollinger Bands and moving averages continue to reflect mild bearishness, with daily moving averages indicating a slightly negative trend. The KST indicator remains bearish on both weekly and monthly scales, while Dow Theory analysis is split, showing mild bullishness weekly but bearishness monthly.

On a positive note, On-Balance Volume (OBV) is bullish on both weekly and monthly charts, signalling accumulation by investors despite price softness. This divergence between volume and price may suggest underlying strength that could support a turnaround in technical momentum.

Stock Price and Market Performance

Manugraph India’s stock price closed at ₹17.50, down 2.18% from the previous close of ₹17.89 on 11 February 2026. The stock has traded within a 52-week range of ₹13.30 to ₹25.69, with the day’s high and low at ₹18.60 and ₹16.51 respectively. Despite recent volatility, the stock has outperformed the Sensex over short-term periods, delivering a 15.13% return over the past week compared to Sensex’s 0.50%.

Year-to-date, the stock has gained 5.11%, while the Sensex has declined by 1.16%. However, over longer horizons, Manugraph India has underperformed significantly, with a negative 0.85% return over the past year versus Sensex’s 10.41%, and a 9.33% loss over three years compared to Sensex’s 38.81% gain. The ten-year return is deeply negative at -60.09%, reflecting structural challenges in the company’s growth trajectory.

Long-Term Challenges Temper Outlook Despite Recent Gains

While the recent upgrade reflects improved financial and valuation metrics, Manugraph India’s long-term fundamentals remain a concern. The company’s average ROE over recent years is effectively zero, indicating limited value creation for shareholders. Operating profit growth over five years has been moderate at 17.41%, and the company’s ability to service debt is weak, with a negative EBIT to interest coverage ratio.

These factors contribute to the cautious stance reflected in the Sell rating, despite the stock’s attractive valuation and positive short-term momentum. Investors should weigh the company’s recent operational improvements against its structural challenges and historical underperformance relative to broader market indices.

Promoters remain the majority shareholders, signalling stable ownership, but the stock’s mixed technical signals and modest financial improvements suggest a watchful approach is warranted.

Conclusion: A Nuanced Upgrade Reflecting Mixed Signals

The upgrade of Manugraph India Ltd’s investment rating from Strong Sell to Sell encapsulates a complex picture. Strong quarterly sales growth, improved profitability, and very attractive valuation metrics have driven a more positive assessment. However, persistent long-term fundamental weaknesses and mixed technical indicators temper enthusiasm.

For investors, the stock presents an opportunity to consider a turnaround story trading at a discount, but with caution due to its uneven historical performance and ongoing operational challenges. Monitoring upcoming quarterly results and technical developments will be key to reassessing the stock’s trajectory in the coming months.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →