Current Rating Overview
MarketsMOJO’s 'Hold' rating for Modison Ltd indicates a balanced view of the stock’s prospects. This rating suggests that investors should maintain their existing positions rather than aggressively buying or selling at this time. The 'Hold' status reflects a combination of factors including the company’s quality, valuation, financial trend, and technical outlook as assessed with the most recent data.
Quality Assessment
As of 02 February 2026, Modison Ltd’s quality grade is considered average. The company demonstrates a strong ability to service its debt, with a low Debt to EBITDA ratio of 0.87 times, signalling prudent financial management and manageable leverage. Additionally, the company’s return on capital employed (ROCE) stands at a robust 14.4%, with the half-year ROCE reaching a high of 15.91%. These figures indicate efficient use of capital and a solid operational foundation.
However, the company’s long-term growth remains modest, with operating profit growing at an annual rate of 8.59% over the past five years. While this growth is positive, it is not particularly rapid, which tempers the overall quality assessment.
Valuation Perspective
Modison Ltd’s valuation is currently very attractive. The stock trades at an enterprise value to capital employed ratio of just 1.8, which is below the average historical valuations of its peers in the Other Electrical Equipment sector. This discount suggests that the market may be undervaluing the company relative to its capital base and earnings potential.
Moreover, the company offers a high dividend yield of 4.1%, providing income-oriented investors with an appealing return component. The price-to-earnings-to-growth (PEG) ratio is a low 0.2, indicating that the stock’s price is reasonable relative to its earnings growth, which has been strong recently with profits rising by 61.4% over the past year.
Financial Trend Analysis
The financial trend for Modison Ltd is positive as of today. The latest quarterly results for September 2025 show a significant improvement, with profit before tax (excluding other income) at ₹14.42 crores, growing by 92.3% compared to the previous four-quarter average. Operating profit to interest coverage is also at a peak of 11.32 times, underscoring the company’s strong earnings relative to its interest obligations.
Despite these encouraging signs, the stock’s price performance has lagged behind the broader market. Over the past year, Modison Ltd has delivered a negative return of -9.19%, while the BSE500 index has gained 4.27%. This underperformance suggests that the market has yet to fully recognise the company’s improving fundamentals.
Technical Outlook
From a technical standpoint, the stock is mildly bearish. Recent price movements show a decline of 0.71% on the day and a 1-month drop of 8.30%. The technical grade reflects some caution among traders and investors, likely influenced by the stock’s underperformance relative to the broader market indices. This mild bearishness suggests that while the stock is not in a strong uptrend, it is not deeply oversold either, supporting the 'Hold' recommendation.
Summary for Investors
In summary, Modison Ltd’s 'Hold' rating reflects a stock with solid financial health, attractive valuation, and improving profitability, balanced against modest long-term growth and cautious technical signals. Investors holding the stock may consider maintaining their positions to benefit from the company’s steady earnings growth and dividend yield, while those considering new investments should weigh the current valuation appeal against the stock’s recent price softness.
Strong fundamentals, steady climb upward! This Large Cap from Telecommunication sector earned its Reliable Performer badge through consistent execution. Safety meets solid returns here!
- - Reliable Performer certified
- - Consistent execution proven
- - Large Cap safety pick
Company Profile and Market Context
Modison Ltd operates within the Other Electrical Equipment sector and is classified as a microcap company. The stock’s current Mojo Score is 51.0, which corresponds to the 'Hold' grade, reflecting a moderate risk-reward profile. The previous rating was 'Sell' with a Mojo Score of 46, updated on 29 December 2025, indicating a slight improvement in the company’s outlook.
Majority ownership remains with promoters, which often provides stability in corporate governance and strategic direction. Despite the stock’s recent underperformance relative to the BSE500, the company’s improving profitability metrics and attractive valuation suggest potential for recovery or consolidation at current levels.
Stock Returns and Market Performance
As of 02 February 2026, Modison Ltd’s stock returns show a mixed picture. The stock has declined by 0.71% on the latest trading day and has fallen 8.30% over the past month. Year-to-date returns stand at -4.61%, and the one-year return is negative at -8.70%. These figures contrast with the broader market’s positive performance, highlighting the stock’s relative weakness.
Investors should consider these returns in the context of the company’s improving earnings and strong dividend yield, which may provide a cushion against further downside and support total returns over the medium term.
Outlook and Considerations
Looking ahead, Modison Ltd’s valuation attractiveness and positive financial trends may attract value-focused investors seeking income and capital preservation. However, the mild bearish technical signals and modest growth prospects suggest that the stock may not be poised for a strong rally in the near term.
Investors are advised to monitor quarterly earnings updates and market conditions closely, as any significant changes in profitability or sector dynamics could influence the stock’s rating and price trajectory.
Conclusion
Modison Ltd’s current 'Hold' rating by MarketsMOJO reflects a nuanced view of the company’s strengths and challenges. With solid financial metrics, an attractive valuation, and improving profitability balanced against cautious technical indicators and modest growth, the stock presents a case for maintaining existing positions while awaiting clearer signals for more decisive investment action.
Unlock special upgrade rates for a limited period. Start Saving Now →
