Market Creators Ltd Rating Upgraded to Sell Amid Mixed Technical and Fundamental Signals

Quality Assessment: Weak Fundamentals Persist

Market Creators continues to grapple with weak long-term fundamentals. The company reported flat financial results for Q2 FY25-26, with operating losses persisting and an earnings per share (EPS) of -₹0.23, marking the lowest quarterly EPS in recent periods. Return on Equity (ROE) remains negative at -4.2%, underscoring the company’s inability to generate shareholder value effectively. Net sales have grown at a modest annual rate of 2.70%, while operating profit has increased by only 7.11%, indicating sluggish growth in core operations.

These figures highlight the company’s struggle to improve profitability and operational efficiency, which continues to weigh on its quality grade. Over the past year, Market Creators’ profits have declined by 75%, a stark contrast to the broader market’s performance and a clear signal of underlying business challenges.

Valuation: Premium Despite Weak Returns

Despite the weak fundamentals, Market Creators trades at a premium valuation relative to its peers. The stock’s Price to Book (P/B) ratio stands at 1.5, which is considered expensive given the company’s negative ROE and operating losses. This premium valuation is not supported by earnings growth or profitability, raising concerns about the stock’s price sustainability.

Over the last year, the stock has generated a return of -2.16%, underperforming the Sensex, which posted a 6.63% gain over the same period. This divergence between valuation and returns suggests that investors may be pricing in expectations of a turnaround that has yet to materialise in the company’s financial results.

Financial Trend: Flat Performance and Operating Losses

The financial trend for Market Creators remains flat, with no significant improvement in quarterly results. The company’s operating losses continue to erode profitability, and the lack of meaningful revenue growth further dampens prospects. The flat performance in September 2025’s quarter reinforces the view that the company is struggling to regain momentum in a competitive NBFC sector.

Long-term returns, however, tell a more mixed story. Over five and ten years, Market Creators has delivered cumulative returns of 208.94% and 271.36% respectively, outperforming the Sensex’s 65.05% and 241.54% over the same periods. This suggests that while recent performance has been disappointing, the company has demonstrated resilience and growth potential over the longer term.

Technical Analysis: Shift to Mildly Bullish Signals

The primary catalyst for the upgrade in Market Creators’ investment rating is the improvement in technical indicators. The technical grade has shifted from mildly bearish to mildly bullish, signalling a potential change in market momentum. Key technical metrics reveal a mixed but improving picture:

• MACD: Weekly readings have turned mildly bullish, although monthly signals remain mildly bearish, indicating short-term positive momentum.


• RSI: Both weekly and monthly Relative Strength Index readings show no clear signal, suggesting the stock is neither overbought nor oversold.


• Bollinger Bands: Weekly bands indicate bullish momentum, while monthly bands remain sideways, reflecting consolidation at higher levels.


• Moving Averages: Daily moving averages are bullish, supporting the recent positive price action.


• KST (Know Sure Thing): Weekly KST is mildly bullish, but monthly remains mildly bearish, consistent with other oscillators.


• Dow Theory: Weekly trend is mildly bullish, while monthly shows no clear trend.

Overall, these technical signals suggest that while the longer-term trend remains uncertain, short-term price action is improving, providing a basis for the rating upgrade. The stock’s current price of ₹14.52 is near its daily low but remains below its 52-week high of ₹17.48, indicating room for recovery if technical momentum sustains.

Market Performance Comparison

Market Creators’ recent returns have been mixed when compared to the broader market. Over the past week, the stock declined by 5.71%, significantly underperforming the Sensex’s 1.73% loss. However, over the past month, the stock marginally outperformed the Sensex with a 0.14% gain versus the index’s 3.24% decline. Year-to-date, the stock is down 4.47%, slightly worse than the Sensex’s 3.57% fall.

Longer-term returns remain more favourable, with the stock outperforming the Sensex over three, five, and ten-year horizons. This performance disparity highlights the stock’s volatility and the importance of monitoring both technical and fundamental factors closely.

Shareholding and Industry Context

Market Creators is majority-owned by promoters, which can provide stability but also raises questions about governance and strategic direction, especially in a challenging operating environment. The company operates within the NBFC sector, which has faced headwinds due to regulatory changes and credit market volatility. These sectoral pressures compound the company’s internal challenges, making the technical improvement a noteworthy but cautious signal for investors.

Conclusion: A Cautious Upgrade Reflecting Technical Recovery

The upgrade of Market Creators Ltd’s investment rating from Strong Sell to Sell reflects a cautious optimism driven by improved technical indicators amid persistent fundamental weaknesses. While the company’s financial performance remains flat with operating losses and weak profitability metrics, the shift to mildly bullish technical trends suggests potential for short-term price recovery.

Investors should weigh the premium valuation and poor recent earnings against the improved technical outlook. The stock’s long-term returns have been strong, but recent profit declines and flat sales growth warrant prudence. As such, the Sell rating signals that while the stock may be stabilising technically, fundamental risks remain significant.

Market Creators Ltd’s case exemplifies the importance of integrating both fundamental and technical analysis in investment decisions, particularly in sectors facing structural challenges.

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