National Plastic Technologies Ltd Upgraded to Hold on Technical and Financial Improvements

Technical Trends Shift to Neutral Territory

The primary catalyst for the upgrade lies in the technical analysis of the stock, which has transitioned from a mildly bearish stance to a sideways trend. Weekly and monthly indicators present a nuanced picture: while the Moving Average Convergence Divergence (MACD) remains mildly bearish on a weekly basis and bearish monthly, other momentum indicators such as the Know Sure Thing (KST) show a bullish weekly signal, offsetting some of the negative momentum.

Further, the Relative Strength Index (RSI) on both weekly and monthly charts currently signals no definitive trend, suggesting a consolidation phase rather than a clear downtrend. Bollinger Bands also reflect a mild bearishness weekly and monthly, but the daily moving averages have turned mildly bullish, indicating short-term positive momentum. The Dow Theory analysis adds to this mixed but improving technical landscape, showing no clear weekly trend but a mildly bullish monthly outlook.

These technical nuances collectively support a more neutral stance, justifying the upgrade from Sell to Hold as the stock appears to be stabilising after a period of weakness.

Valuation Metrics Signal Attractive Entry Point

National Plastic Technologies Ltd currently trades at ₹258.00, marginally up from the previous close of ₹257.50. The stock remains well below its 52-week high of ₹362.35, indicating a significant discount of approximately 29%. This valuation gap is further underscored by the company’s Enterprise Value to Capital Employed (EV/CE) ratio of 1.9, which is attractive relative to its peers in the Plastic Products - Industrial sector.

Despite the stock’s underperformance over the past year, with a return of -24.50% compared to the BSE500’s positive 10.15%, the company’s price-to-earnings growth (PEG) ratio stands at 2.7. This suggests that while the stock is not deeply undervalued, it offers reasonable value considering its growth prospects. The upgrade to Hold reflects this improved valuation perspective, signalling that the stock is no longer a clear sell on price grounds.

Financial Trends Demonstrate Robust Operational Efficiency

National Plastic Technologies has delivered positive financial results in Q2 FY25-26, reinforcing confidence in its operational strength. The company boasts a high Return on Capital Employed (ROCE) of 15.37%, with some reports indicating a slightly higher figure of 16.2%, underscoring efficient capital utilisation. Net sales have grown at an impressive annual rate of 36.86%, highlighting strong top-line momentum.

Operating profit to interest coverage ratio stands at a healthy 5.55 times, indicating comfortable debt servicing capacity. Dividend per share (DPS) has reached a peak of ₹1.50, with a dividend payout ratio (DPR) of 10.10%, reflecting a shareholder-friendly approach. These financial metrics contribute to the company’s quality grade and support the Hold rating, as they demonstrate sustainable profitability and prudent management.

Quality Assessment and Market Position

National Plastic Technologies is classified with a Mojo Score of 54.0, placing it in the Hold category, upgraded from a previous Sell rating. The company holds a Market Cap Grade of 4, indicating a mid-sized market capitalisation within its sector. Promoters remain the majority shareholders, ensuring stable ownership and strategic continuity.

Long-term returns have been impressive, with a 5-year return of 782.05% and a 10-year return of 473.97%, significantly outperforming the Sensex’s respective 68.97% and 236.47% gains. However, the recent one-year underperformance highlights short-term challenges, possibly linked to sectoral headwinds or broader market volatility. The Hold rating reflects a balanced view, acknowledging both the company’s strong fundamentals and recent price weakness.

Comparative Performance and Market Context

While National Plastic Technologies has underperformed the broader market in the short term, its long-term track record remains robust. Over the past three years, the stock has delivered a cumulative return of 114.91%, nearly triple the Sensex’s 38.78% gain. This disparity highlights the cyclical nature of the stock and the importance of a long-term investment horizon.

Short-term returns have been negative across multiple periods: -8.19% over one week, -10.80% over one month, and -7.86% year-to-date, compared to the Sensex’s modest positive returns. This recent weakness has been a drag on sentiment but has not materially impacted the company’s underlying financial health or growth trajectory.

Outlook and Investment Considerations

The upgrade to Hold reflects a cautious optimism. The improved technical indicators suggest the stock may be stabilising after a period of decline, while valuation metrics indicate it is trading at a reasonable discount relative to peers. Financially, the company’s strong ROCE, sales growth, and dividend policy provide a solid foundation for future performance.

Investors should weigh the stock’s recent underperformance against its long-term growth potential and operational efficiency. The Hold rating advises patience and monitoring for further confirmation of a sustained uptrend before considering a more bullish stance.

Summary of Ratings and Scores

National Plastic Technologies Ltd’s current Mojo Score is 54.0, upgraded from a previous Sell rating to Hold as of 13 Jan 2026. The Market Cap Grade remains at 4, reflecting its mid-tier market capitalisation. Technical grades have improved from mildly bearish to sideways, with mixed signals across MACD, RSI, Bollinger Bands, and moving averages. Financial metrics such as ROCE (15.37%-16.2%), operating profit to interest coverage (5.55x), and dividend payout ratios support the company’s quality assessment.

Overall, the upgrade signals a more balanced risk-reward profile, encouraging investors to consider the stock as a Hold within their portfolios.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →