Milestone Global Ltd Downgraded to Strong Sell Amidst Weak Financials and Technical Setbacks

Quality Assessment: Weakening Fundamentals and Profitability

Milestone Global’s quality metrics have deteriorated, signalling a weakening operational and financial health. The company reported flat financial performance in Q2 FY25-26, with operating losses continuing to weigh heavily on its prospects. The quarterly PBDIT stood at a negative ₹0.12 crore, while PBT excluding other income was also negative at ₹0.21 crore. Earnings per share (EPS) for the quarter were at a low of -₹0.20, underscoring the lack of profitability.

Long-term fundamental strength remains weak, with the company’s ability to service debt under pressure. The average EBIT to interest ratio is a concerning 0.43, indicating that operating earnings are insufficient to comfortably cover interest expenses. Return on equity (ROE) averaged only 6.36%, reflecting low profitability relative to shareholders’ funds. These factors collectively contribute to a poor quality grade and justify the downgrade in investment rating.

Valuation: Risky and Below Historical Averages

From a valuation perspective, Milestone Global is trading at levels that are considered risky compared to its historical averages. Over the past year, the stock has generated a negative return of -24.05%, significantly underperforming the broader market benchmarks such as the BSE Sensex, which posted a positive 7.62% return over the same period. The stock’s 52-week price range between ₹13.72 and ₹37.64 highlights considerable volatility, with the current price of ₹25.90 closer to the lower end of this spectrum.

Profitability has also declined by approximately 10% over the last year, further undermining valuation support. The stock’s underperformance extends beyond the short term, with returns over the last three years at 26.34%, lagging behind the Sensex’s 38.54% gain. Even over a five- and ten-year horizon, while the stock has outperformed the Sensex with returns of 177.01% and 418.00% respectively, recent trends suggest a loss of momentum and increased valuation risk.

Financial Trend: Flat to Negative Performance

The financial trend for Milestone Global remains flat to negative, with no signs of meaningful recovery in recent quarters. The company’s operating losses and weak profitability metrics have persisted, signalling ongoing challenges in its core business operations. The flat results in September 2025 reinforce this trend, with no significant improvement in earnings or cash flow generation.

Debt servicing remains a critical concern, as the company’s EBIT to interest coverage ratio of 0.43 is well below the comfortable threshold of 1.5 or higher typically preferred by investors. This weak coverage ratio indicates vulnerability to interest rate fluctuations and refinancing risks. The low ROE further highlights the company’s inability to generate adequate returns on equity, which is a key indicator of financial health and shareholder value creation.

Technical Analysis: Shift from Mildly Bullish to Sideways

The downgrade in Milestone Global’s investment rating is also driven by a notable change in its technical outlook. The technical grade has shifted from mildly bullish to sideways, reflecting uncertainty and lack of clear directional momentum in the stock price. Key technical indicators present a mixed and cautious picture:

• MACD: Both weekly and monthly charts show mildly bearish signals, suggesting weakening momentum.


• RSI: No clear signal on weekly or monthly timeframes, indicating indecision among traders.


• Bollinger Bands: Weekly readings are mildly bearish, with monthly bands signalling bearishness, pointing to increased volatility and potential downward pressure.


• Moving Averages: Daily charts remain mildly bullish, but this is insufficient to offset broader negative trends.


• KST (Know Sure Thing): Weekly indicator is bullish, but monthly is mildly bearish, reflecting short-term optimism tempered by longer-term caution.


• Dow Theory: Weekly trend is mildly bearish, while monthly trend is mildly bullish, further illustrating mixed signals.

Overall, the technical landscape suggests that the stock is struggling to establish a sustained upward trajectory, with sideways movement likely in the near term. This technical uncertainty has contributed significantly to the downgrade in the company’s mojo grade from Sell to Strong Sell, now rated at 23.0.

Market Capitalisation and Shareholder Structure

Milestone Global holds a market cap grade of 4, indicating a relatively small market capitalisation within its sector. The majority shareholding remains with promoters, which can be a double-edged sword; while promoter control can ensure strategic continuity, it may also limit liquidity and increase governance risks if not managed transparently.

The stock’s recent price action shows a day change of +3.06%, with a high of ₹26.00 and a low of ₹23.88 on the day of the rating change. Despite this intraday strength, the broader trend remains negative, as evidenced by the stock’s underperformance relative to the Sensex across multiple timeframes.

Comparative Performance: Underperforming Benchmarks

When compared to the Sensex, Milestone Global’s returns have been disappointing. Over the last week, the stock declined by 5.47% versus a 1.02% drop in the Sensex. Over one month, the stock fell 14.15%, while the Sensex was down only 1.18%. Year-to-date and one-year returns are particularly stark, with the stock losing 23.80% and 24.05% respectively, while the Sensex gained 8.39% and 7.62% over the same periods.

Even over a three-year horizon, the stock’s 26.34% return trails the Sensex’s 38.54%. Although the company has outperformed the Sensex over five and ten years, recent trends suggest a loss of competitive edge and increasing risk for investors.

Conclusion: Strong Sell Rating Reflects Elevated Risks

Milestone Global Ltd’s downgrade to a Strong Sell rating is driven by a confluence of factors: deteriorating financial quality marked by operating losses and weak debt servicing ability; risky valuation levels amid declining profitability; flat to negative financial trends; and a technical outlook that has shifted from mildly bullish to sideways with bearish undertones. The company’s underperformance relative to market benchmarks further compounds concerns.

Investors should exercise caution given the elevated risks and lack of clear catalysts for turnaround. The downgrade to a mojo grade of 23.0 and a Strong Sell recommendation reflects the need for a conservative stance until the company demonstrates sustained improvement in fundamentals and technical momentum.

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