Nihar Info Global Ltd Upgraded to Hold on Technical and Financial Improvements

Technical Trends Signal Renewed Momentum

The primary catalyst for the upgrade was a marked improvement in the company’s technical grade, which shifted from mildly bullish to bullish. Key technical indicators underpinning this shift include a bullish Moving Average Convergence Divergence (MACD) on the weekly chart and a bullish stance on Bollinger Bands across both weekly and monthly timeframes. The daily moving averages also support a bullish trend, signalling positive momentum in the stock price.

While the Relative Strength Index (RSI) on weekly and monthly charts remains neutral with no clear signal, the overall technical picture is encouraging. The Dow Theory assessment is mildly bullish on the weekly scale, although monthly trends show no definitive direction. The KST (Know Sure Thing) indicator presents a mixed view, mildly bearish weekly but mildly bullish monthly, suggesting some short-term volatility but a positive medium-term outlook.

These technical improvements have coincided with a strong price performance, with the stock closing at ₹7.15 on 9 January 2026, hitting its 52-week high. This represents a 10.00% gain on the day and a significant rally from the previous close of ₹6.50. The stock’s intraday range between ₹6.80 and ₹7.15 further underscores the bullish sentiment among traders.

Financial Trend: Strong Quarterly Performance Amid Mixed Long-Term Metrics

Nihar Info Global Ltd reported very positive financial results for the quarter ending September 2025 (Q2 FY25-26), which contributed to the upgrade. Net sales surged by an impressive 106.25%, reaching ₹5.92 crores, the highest quarterly figure recorded by the company. Profit before depreciation, interest, and taxes (PBDIT) also hit a peak of ₹1.35 crores, signalling improved operational efficiency.

The company’s debtors turnover ratio for the half-year stood at 2.80 times, indicating effective receivables management and cash flow generation. These metrics reflect a short-term financial strength that supports the Hold rating.

However, the long-term financial picture remains challenging. The average Return on Capital Employed (ROCE) is effectively zero, highlighting a lack of sustainable profitability over time. Operating profit has declined at an annualised rate of -262.79% over the past five years, signalling structural issues in earnings growth. Additionally, the company’s ability to service debt is weak, with an average EBIT to interest coverage ratio of -2.75, raising concerns about financial risk.

Valuation and Market Performance

The company’s Mojo Score currently stands at 51.0, with a Mojo Grade upgraded from Sell to Hold as of 8 January 2026. The Market Cap Grade is 4, reflecting a mid-cap valuation tier. Despite the Hold rating, the stock has outperformed broader market indices recently. Over the past year, Nihar Info Global Ltd generated a return of 16.45%, significantly higher than the BSE500 benchmark return of 6.23% for the same period.

Year-to-date returns are also robust at 12.78%, compared to a negative 1.22% for the Sensex. One-month and one-week returns are even more striking, with gains of 19.77% and 16.26% respectively, while the Sensex declined by over 1% in both periods. This market-beating performance has helped justify the upgrade despite the company’s weak long-term fundamentals.

Nonetheless, the stock’s long-term returns over three and ten years remain negative (-22.28% and -72.71% respectively), lagging the Sensex’s strong gains over those horizons. This dichotomy suggests that while the company is currently benefiting from positive momentum and short-term financial improvements, investors should remain cautious about its longer-term prospects.

Quality Assessment: Mixed Signals

The company’s quality grade remains cautious, reflecting the mixed nature of its financial health. While quarterly results and technical indicators have improved, the underlying fundamentals such as return on capital and operating profit trends remain weak. The negative EBITDA and poor debt servicing ability add to the risk profile, suggesting that the company is still vulnerable to adverse market conditions or operational setbacks.

Investors should weigh the short-term gains against these structural weaknesses when considering their exposure to Nihar Info Global Ltd.

Conclusion: A Balanced Upgrade Reflecting Current Strengths and Risks

The upgrade of Nihar Info Global Ltd’s investment rating from Sell to Hold is primarily driven by a significant improvement in technical indicators and a strong quarterly financial performance. The stock’s recent price momentum and market-beating returns over the past year support a more positive near-term outlook.

However, the company’s long-term fundamentals remain a concern, with weak profitability metrics and debt servicing capacity. This justifies the Hold rating rather than a more bullish stance. Investors should monitor upcoming quarterly results and technical trends closely to assess whether the company can sustain its recent improvements or if further fundamental strengthening is required.

Overall, the rating change reflects a nuanced view that balances encouraging short-term developments with caution over longer-term risks.

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