Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Narmada Gelatines Ltd indicates a balanced stance on the stock, suggesting that investors should maintain their existing positions rather than aggressively buying or selling. This rating reflects a moderate outlook based on a comprehensive evaluation of the company’s quality, valuation, financial trends, and technical indicators. The rating was adjusted on 12 January 2026, when the Mojo Score declined by 19 points from 74 to 55, signalling a shift from a 'Buy' to a 'Hold' recommendation. Despite this change, it is crucial to consider the latest data as of 05 February 2026 to understand the stock’s current investment potential.
Quality Assessment
As of 05 February 2026, Narmada Gelatines Ltd maintains a good quality grade, underpinned by strong management efficiency and robust profitability metrics. The company boasts a high Return on Capital Employed (ROCE) of 16.07%, reflecting effective utilisation of capital to generate earnings. Additionally, the Return on Equity (ROE) stands at an attractive 16.9%, indicating solid returns for shareholders. The company’s low average Debt to Equity ratio of 0.05 times further enhances its quality profile by signalling minimal financial leverage and reduced risk from debt obligations. These factors collectively contribute to the company’s stable operational foundation.
Valuation Perspective
Currently, Narmada Gelatines Ltd is valued attractively, trading at a Price to Book Value of 1.7. This valuation is considered fair relative to its peers and historical averages, suggesting that the stock is neither overvalued nor undervalued in the current market environment. The company’s Price/Earnings to Growth (PEG) ratio is notably low at 0.3, which implies that the stock’s price growth is favourable compared to its earnings growth rate. Over the past year, the stock has delivered a modest return of 2.88%, while profits have surged by 30.6%, highlighting a disconnect between earnings growth and share price appreciation that may interest value-conscious investors.
Financial Trend and Performance
The latest financial data as of 05 February 2026 reveals a positive trend in Narmada Gelatines Ltd’s operational performance. The company reported its highest quarterly PBDIT at ₹9.35 crores in September 2025, alongside an operating profit to net sales ratio of 18.26%, the highest recorded in recent quarters. Profit Before Tax (PBT) excluding other income also peaked at ₹8.50 crores during the same period. Despite these encouraging results, the company’s long-term sales growth remains modest, with net sales increasing at an annualised rate of 9.60% over the past five years. This slower growth rate tempers the otherwise positive financial momentum and is a key consideration in the current rating.
Technical Analysis
From a technical standpoint, the stock exhibits a mildly bearish trend as of early February 2026. The share price has experienced some volatility, with a one-day decline of 0.28%, a one-month dip of 2.19%, but a three-month gain of 4.77%. Year-to-date, the stock has appreciated by 3.39%, and over the past year, it has delivered a modest 2.88% return. These mixed signals suggest cautious investor sentiment, reinforcing the 'Hold' rating as the stock navigates a period of consolidation rather than clear upward momentum.
Investment Implications
For investors, the 'Hold' rating on Narmada Gelatines Ltd implies that the stock currently offers neither compelling reasons to buy aggressively nor urgent signals to sell. The company’s strong management efficiency, attractive valuation, and positive financial trends provide a solid foundation, but the modest long-term growth and mild technical weakness warrant a cautious approach. Investors should monitor upcoming quarterly results and market developments closely to reassess the stock’s potential for future appreciation.
Company Profile and Market Context
Narmada Gelatines Ltd operates within the Specialty Chemicals sector and is classified as a microcap company. The majority shareholding remains with promoters, which often suggests stable ownership and strategic continuity. Despite its smaller market capitalisation, the company has demonstrated resilience and operational strength, as reflected in its recent financial performance and efficiency metrics.
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Summary and Outlook
In summary, Narmada Gelatines Ltd’s current 'Hold' rating by MarketsMOJO reflects a nuanced view of the company’s prospects as of 05 February 2026. The stock’s solid quality metrics, attractive valuation, and positive financial trends are balanced by modest long-term growth and a mildly bearish technical outlook. Investors should consider maintaining their positions while keeping a close watch on forthcoming earnings and sector developments to identify any shifts that could warrant a change in stance.
Key Metrics at a Glance (As of 05 February 2026):
- Mojo Score: 55.0 (Hold)
- ROCE: 16.07%
- ROE: 16.9%
- Debt to Equity Ratio: 0.05 times
- Price to Book Value: 1.7
- PEG Ratio: 0.3
- 1-Year Stock Return: +2.88%
- 5-Year Net Sales Growth: 9.60% CAGR
These figures provide a comprehensive snapshot of the company’s current standing and help investors make informed decisions based on up-to-date information rather than historical data alone.
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