Understanding the Current Rating
MarketsMOJO’s Strong Sell rating indicates a cautious stance towards Pacific Industries Ltd, signalling that the stock is expected to underperform relative to the broader market and its sector 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 10 February 2026, Pacific Industries Ltd exhibits below-average quality metrics. The company’s long-term fundamental strength is weak, with a compounded annual growth rate (CAGR) in operating profits of -35.97% over the past five years. This negative growth trajectory highlights persistent challenges in generating sustainable earnings. Additionally, the company’s ability to service its debt remains fragile, evidenced by an average EBIT to interest coverage ratio of just 0.83, which is below the threshold generally considered safe by creditors and investors alike.
Profitability is also a concern, with an average return on equity (ROE) of 2.34%, indicating limited efficiency in generating profits from shareholders’ funds. This low ROE suggests that the company is struggling to deliver value to its investors, which weighs heavily on its quality grade.
Valuation Considerations
Pacific Industries Ltd is currently classified as very expensive relative to its fundamentals. Despite its microcap status within the diversified consumer products sector, the stock trades at a price-to-book (P/B) ratio of 0.2, which is elevated when compared to its peers’ historical valuations. This premium valuation is difficult to justify given the company’s deteriorating financial performance and weak profitability metrics.
Investors should note that the stock’s valuation does not reflect a bargain but rather a disconnect from underlying fundamentals, which increases downside risk. The market’s pricing appears to be overly optimistic or disconnected from the company’s operational realities.
Financial Trend Analysis
The latest data as of 10 February 2026 reveals a very negative financial trend for Pacific Industries Ltd. The company reported a sharp decline in net profit, falling by -69.73% in the December 2025 quarter. This marks the third consecutive quarter of negative results, underscoring ongoing operational difficulties.
Net sales for the quarter were at a low of ₹26.69 crores, while the operating profit to interest coverage ratio stood at a precarious 1.44 times, barely sufficient to cover interest expenses. The latest six-month profit after tax (PAT) was ₹0.70 crore, reflecting a contraction of -47.29%. Over the past year, the stock has delivered a negative return of -34.08%, while profits have declined by -60.8%, signalling a sustained period of underperformance.
Technical Outlook
From a technical perspective, the stock is currently bearish. Despite short-term gains such as a 2.96% increase on the most recent trading day and a 10.28% rise over the past week, the medium to long-term trend remains negative. Over three months, the stock has declined by -11.87%, and over six months by -23.04%, reflecting persistent selling pressure and weak investor sentiment.
These technical signals align with the fundamental challenges faced by the company, reinforcing the rationale behind the Strong Sell rating.
What This Means for Investors
For investors, the Strong Sell rating on Pacific Industries Ltd serves as a cautionary indicator. It suggests that the stock is likely to continue facing headwinds and may not be a suitable candidate for accumulation or long-term holding at this stage. The combination of weak quality metrics, expensive valuation, deteriorating financial trends, and bearish technicals points to elevated risk and limited upside potential.
Investors should carefully consider these factors in the context of their portfolio strategy and risk tolerance. Those seeking exposure to the diversified consumer products sector may wish to explore alternatives with stronger fundamentals and more favourable valuations.
Transformation in full progress! This Micro Cap from Auto Ancillary just achieved sustainable profitability after tough times. Be early to witness this powerful comeback story!
- - Sustainable profitability reached
- - Post-turnaround strength
- - Comeback story unfolding
Summary of Key Metrics as of 10 February 2026
Pacific Industries Ltd’s current Mojo Score stands at 5.0, reflecting a significant decline from its previous score of 40. The downgrade to a Strong Sell rating on 28 May 2025 was driven by this deterioration in core metrics. The company’s market capitalisation remains in the microcap category, which often entails higher volatility and risk.
Stock returns over various time frames illustrate the challenging environment: a 1-day gain of 2.96%, a 1-week increase of 10.28%, and a 1-month rise of 6.28% contrast sharply with negative returns over longer periods — 3 months at -11.87%, 6 months at -23.04%, and a year-to-date gain of 6.35% overshadowed by a 1-year loss of -34.08%.
These figures underscore the stock’s volatility and the underlying weakness in its financial and operational performance.
Investor Takeaway
In conclusion, Pacific Industries Ltd’s Strong Sell rating by MarketsMOJO is a reflection of its current financial fragility, expensive valuation, and negative technical outlook. Investors should approach this stock with caution and consider the risks associated with its ongoing operational challenges and market performance.
Monitoring the company’s quarterly results and any strategic initiatives aimed at reversing its fortunes will be crucial for reassessing its investment potential in the future.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
