Current Rating Overview
MarketsMOJO’s 'Hold' rating for Modi Naturals Ltd indicates a neutral stance, suggesting that investors should maintain their existing positions rather than aggressively buying or selling the stock at this time. This rating is based on a comprehensive assessment of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The company’s Mojo Score currently stands at 51.0, reflecting a modest improvement from the previous score of 46, which corresponded to a 'Sell' rating. This shift to 'Hold' signals a more balanced outlook on the stock’s prospects.
Quality Assessment
As of 13 February 2026, Modi Naturals Ltd exhibits an average quality grade. The company’s Return on Capital Employed (ROCE) averages 9.64%, which is relatively low and indicates limited profitability per unit of capital invested. This suggests that while the company is generating returns, efficiency in capital utilisation remains a concern. Additionally, the firm’s ability to service its debt is constrained, with a high Debt to EBITDA ratio of 13.03 times, signalling elevated leverage and potential financial risk. These factors temper the overall quality assessment, highlighting areas where operational improvements could enhance shareholder value.
Valuation Perspective
Despite the average quality metrics, Modi Naturals Ltd’s valuation is currently very attractive. The stock trades at a discount relative to its peers, with an Enterprise Value to Capital Employed ratio of just 2.1. This low valuation multiple suggests that the market may be undervaluing the company’s assets and earnings potential. Supporting this view, the company’s Price/Earnings to Growth (PEG) ratio stands at a notably low 0.1, indicating that the stock’s price growth is modest compared to its earnings growth. Investors seeking value opportunities may find this aspect appealing, as the stock offers potential upside if operational and financial trends improve.
Financial Trend and Profitability
The financial trend for Modi Naturals Ltd is positive, reflecting encouraging growth in profitability. The company has demonstrated healthy long-term growth, with operating profit increasing at an annual rate of 78.09%. Furthermore, Modi Naturals has reported positive results for seven consecutive quarters, underscoring consistent earnings momentum. The latest half-year figures show a Profit After Tax (PAT) of ₹20.56 crores, growing at 36.70%, and a half-year ROCE reaching a high of 19.14%. Cash and cash equivalents have also improved, standing at ₹5.99 crores, which strengthens the company’s liquidity position. These trends suggest that Modi Naturals is on a path of improving financial health, which supports the current 'Hold' rating.
Technical Analysis
From a technical standpoint, the stock currently exhibits bearish signals. Price performance over recent periods has been mixed, with a one-day decline of 1.06% and a one-month drop of 2.29%. More notably, the stock has declined by 21.87% over three months and 18.59% over six months, reflecting downward momentum. Year-to-date, the stock is down 2.74%, and over the past year, it has delivered a negative return of 15.58%. These technical indicators suggest caution for short-term traders, as the stock faces resistance and downward pressure despite improving fundamentals.
Stock Returns and Market Context
As of 13 February 2026, Modi Naturals Ltd’s stock returns present a mixed picture. While the one-week return is positive at 4.85%, longer-term returns have been negative, reflecting broader market volatility and sector-specific challenges. The stock’s microcap status and its classification within the 'Other Agricultural Products' sector mean it may be more susceptible to market fluctuations and liquidity constraints. Investors should weigh these factors alongside the company’s improving financial metrics when considering their investment decisions.
Implications for Investors
The 'Hold' rating for Modi Naturals Ltd suggests that investors should adopt a cautious approach. The company’s very attractive valuation and positive financial trends offer potential for future gains, but these are balanced by average quality metrics and bearish technical signals. Investors already holding the stock may choose to maintain their positions while monitoring operational improvements and market developments. Prospective investors might consider waiting for clearer signs of sustained financial strength and technical recovery before initiating new positions.
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Summary of Key Metrics
To summarise, Modi Naturals Ltd’s current metrics as of 13 February 2026 are as follows:
- Mojo Score: 51.0 (Hold rating)
- ROCE (average): 9.64%
- Debt to EBITDA ratio: 13.03 times
- Operating profit growth rate: 78.09% annually
- Profit After Tax (latest six months): ₹20.56 crores, up 36.70%
- Half-year ROCE: 19.14%
- Cash and cash equivalents: ₹5.99 crores
- Enterprise Value to Capital Employed: 2.1
- PEG ratio: 0.1
- Stock returns: 1D -1.06%, 1W +4.85%, 1M -2.29%, 3M -21.87%, 6M -18.59%, YTD -2.74%, 1Y -15.58%
Outlook
While the company faces challenges related to capital efficiency and debt servicing, its strong profit growth and attractive valuation provide a foundation for potential recovery. Investors should continue to monitor quarterly results and market conditions closely. The current 'Hold' rating reflects a balanced view, recognising both the risks and opportunities inherent in Modi Naturals Ltd’s business and stock performance.
About Modi Naturals Ltd
Modi Naturals Ltd operates within the 'Other Agricultural Products' sector and is classified as a microcap company. Its business fundamentals and market positioning are evolving, with recent financial results indicating a positive trajectory in profitability and cash flow generation. The company’s stock remains under close observation by market participants seeking value in niche agricultural segments.
Conclusion
In conclusion, Modi Naturals Ltd’s 'Hold' rating by MarketsMOJO, effective from 11 February 2026, is supported by a combination of average quality, very attractive valuation, positive financial trends, and bearish technicals as of 13 February 2026. This rating advises investors to maintain a watchful stance, balancing the company’s growth potential against its operational and market risks.
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