Current Rating Overview
MarketsMOJO’s Strong Sell rating for Om Infra Ltd indicates a cautious stance for investors, signalling that the stock is expected to underperform relative to the broader market and its peers. This recommendation is grounded in a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal and risk profile.
Quality Assessment
As of 25 February 2026, Om Infra Ltd’s quality grade is categorised as below average. The company has demonstrated weak long-term fundamental strength, with a concerning compound annual growth rate (CAGR) of -175.84% in operating profits over the past five years. This steep decline highlights persistent operational challenges and an inability to generate sustainable earnings growth.
Further, the company’s ability to service its debt remains fragile, with an average EBIT to interest coverage ratio of just 1.16. This low ratio suggests limited buffer to meet interest obligations, increasing financial risk. Return on equity (ROE) averages at a modest 3.71%, indicating low profitability relative to shareholders’ funds. Such metrics reflect structural weaknesses in the company’s core business operations and capital efficiency.
Valuation Considerations
Om Infra Ltd’s valuation is currently classified as risky. The stock trades at levels that are unfavourable compared to its historical averages, signalling potential overvaluation or market scepticism. Despite a 16.8% rise in profits over the past year, the stock has delivered a negative return of -23.68% during the same period, underscoring a disconnect between earnings performance and market sentiment.
The company’s price-to-earnings-to-growth (PEG) ratio stands at 1.8, which is relatively high given the negative outlook on fundamentals and financial trends. This elevated PEG ratio suggests that investors may be paying a premium for growth that is currently uncertain or not reflected in the company’s financial health.
Financial Trend Analysis
The financial trend for Om Infra Ltd is negative, with several indicators pointing to deteriorating performance. The company has reported negative results for eight consecutive quarters, a clear sign of ongoing operational difficulties. The profit after tax (PAT) for the nine months ended recently stands at ₹13.40 crores, having declined at a rate of -36.49%.
Return on capital employed (ROCE) is notably low at 2.79%, reflecting poor utilisation of capital resources. Additionally, the debtors turnover ratio is at a low 1.84 times, indicating inefficiencies in receivables management and potential liquidity concerns. These trends collectively highlight a weakening financial position that weighs heavily on the stock’s outlook.
Technical Outlook
From a technical perspective, Om Infra Ltd is mildly bearish. The stock’s recent price movements show volatility and downward pressure, with a one-day decline of -1.78% and a one-week drop of -6.16%. Over the past three and six months, the stock has fallen by -17.91% and -17.52% respectively, signalling sustained selling interest.
Year-to-date, the stock has declined by -11.24%, and over the last year, it has underperformed the broader market significantly. While the BSE500 index has generated returns of 14.43% in the past year, Om Infra Ltd has delivered a negative return of -23.68%, reflecting weak investor confidence and technical weakness.
Market Position and Sector Context
Operating within the construction sector, Om Infra Ltd is classified as a microcap company, which often entails higher volatility and risk. The sector itself has seen mixed performance, with some companies benefiting from infrastructure development and government spending, while others face headwinds from rising input costs and project delays.
Om Infra Ltd’s current financial and operational challenges place it at a disadvantage relative to peers, limiting its ability to capitalise on sector opportunities. Investors should consider these factors carefully when evaluating the stock’s prospects.
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Implications for Investors
The Strong Sell rating on Om Infra Ltd serves as a cautionary signal for investors. It suggests that the stock currently carries elevated risks and is expected to underperform the market. Investors should be wary of the company’s weak fundamentals, risky valuation, negative financial trends, and bearish technical indicators.
For those holding the stock, it may be prudent to reassess their exposure and consider risk mitigation strategies. Potential investors should approach with caution, conducting thorough due diligence and considering alternative opportunities with stronger financial health and growth prospects.
Summary
In summary, Om Infra Ltd’s Strong Sell rating by MarketsMOJO, last updated on 04 August 2025, reflects a comprehensive evaluation of its current challenges and risks. As of 25 February 2026, the company exhibits below-average quality, risky valuation, negative financial trends, and a mildly bearish technical outlook. These factors collectively justify the cautious stance and highlight the need for investors to carefully weigh the risks before considering this stock for their portfolios.
Stock Returns Snapshot
As of 25 February 2026, Om Infra Ltd’s stock returns illustrate its recent performance struggles:
- 1 Day: -1.78%
- 1 Week: -6.16%
- 1 Month: +14.21%
- 3 Months: -17.91%
- 6 Months: -17.52%
- Year-to-Date: -11.24%
- 1 Year: -23.68%
These figures underscore the stock’s volatility and underperformance relative to the broader market, reinforcing the rationale behind the Strong Sell rating.
Financial Metrics at a Glance
Key financial indicators as of 25 February 2026 include:
- Operating Profit CAGR (5 years): -175.84%
- EBIT to Interest Coverage Ratio (average): 1.16
- Return on Equity (average): 3.71%
- Profit After Tax (9 months): ₹13.40 crores, declining at -36.49%
- Return on Capital Employed (half-year): 2.79%
- Debtors Turnover Ratio (half-year): 1.84 times
- PEG Ratio: 1.8
These metrics highlight the company’s operational and financial difficulties, which weigh heavily on its investment appeal.
Conclusion
Om Infra Ltd’s current Strong Sell rating is a reflection of its ongoing struggles across multiple dimensions of business performance. Investors should interpret this rating as a signal to exercise caution and consider the broader market context and company-specific risks before making investment decisions. Continuous monitoring of the company’s financial health and market developments will be essential for those interested in this stock.
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