Pasupati Spinning & Weaving Mills Ltd is Rated Sell

Understanding the Current Rating

The 'Sell' rating assigned to Pasupati Spinning & Weaving Mills Ltd indicates a cautious stance for investors. It suggests that the stock is expected to underperform relative to the broader market or its sector peers in the near to medium term. This recommendation is based on 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.

Quality Assessment

As of 11 February 2026, the company’s quality grade remains below average. This is primarily due to its weak long-term fundamental strength. The average Return on Capital Employed (ROCE) stands at a modest 4.25%, which is considerably low for a company in the garments and apparels sector. Additionally, the company’s net sales have grown at an annual rate of 7.45% over the past five years, indicating sluggish growth relative to industry standards. Such figures suggest limited operational efficiency and challenges in generating robust returns on invested capital.

Valuation Perspective

Despite the quality concerns, the valuation grade for Pasupati Spinning & Weaving Mills Ltd is attractive. This implies that the stock is trading at a price level that may offer value relative to its earnings, assets, or cash flows. Investors looking for potential bargains might find this aspect appealing, as the market price could be discounting some of the company’s risks. However, attractive valuation alone does not offset the underlying fundamental weaknesses and other risk factors.

Financial Trend Analysis

The financial grade is currently flat, reflecting a lack of significant improvement or deterioration in the company’s financial health. The latest data shows that the company reported flat results in the December 2025 half-year period. Cash and cash equivalents are notably low, recorded at just ₹0.88 crore, which raises concerns about liquidity and the ability to meet short-term obligations. Furthermore, the company carries a high Debt to EBITDA ratio of 14.55 times, indicating a heavy debt burden that could strain financial flexibility and increase vulnerability to economic downturns.

Technical Outlook

From a technical standpoint, the stock is graded bearish. Price performance over recent periods supports this view, with the stock showing a 1-month decline of 10.06%, a 3-month drop of 16.58%, and a 6-month decrease of 16.22%. Year-to-date, the stock has fallen by 5.45%, and over the past year, it has declined by 8.24%. These trends suggest persistent selling pressure and a lack of positive momentum, which may deter short-term traders and investors seeking growth.

Stock Performance Summary

As of 11 February 2026, Pasupati Spinning & Weaving Mills Ltd’s stock has experienced mixed returns in the very short term, with a 1-day change of 0.00% and a 1-week gain of 3.17%. However, the broader trend remains negative, reflecting ongoing challenges in the company’s operational and financial environment. The microcap status of the company also implies higher volatility and risk, which investors should carefully consider.

Implications for Investors

The 'Sell' rating signals that investors should exercise caution with Pasupati Spinning & Weaving Mills Ltd. While the stock’s valuation appears attractive, the combination of below-average quality, flat financial trends, and bearish technical indicators suggests limited upside potential and elevated risk. Investors may want to prioritise capital preservation and consider alternative opportunities with stronger fundamentals and more favourable technical setups.

Sector and Market Context

Operating within the garments and apparels sector, Pasupati Spinning & Weaving Mills Ltd faces competitive pressures and evolving consumer preferences. The sector has seen varied performance across companies, with some benefiting from export demand and others struggling with input cost inflation and supply chain disruptions. The company’s microcap status further accentuates the risks associated with limited market liquidity and potential volatility.

Conclusion

In summary, Pasupati Spinning & Weaving Mills Ltd’s current 'Sell' rating by MarketsMOJO reflects a balanced consideration of its operational challenges, financial constraints, and market performance as of 11 February 2026. Investors should weigh the attractive valuation against the company’s below-average quality, flat financial trends, and bearish technical signals. This rating advises prudence and suggests that the stock may not be suitable for those seeking growth or stability in the near term.

Monitoring the Stock

Given the company’s financial and technical profile, investors who hold the stock or are considering entry should closely monitor upcoming quarterly results, cash flow developments, and any strategic initiatives aimed at deleveraging or improving operational efficiency. Changes in these areas could influence future ratings and investment decisions.

About MarketsMOJO Ratings

MarketsMOJO’s rating system integrates multiple dimensions of stock analysis to provide investors with a comprehensive view of a company’s investment potential. The 'Sell' rating indicates that the stock is expected to underperform relative to the market, based on current data and trends. This rating helps investors make informed decisions by highlighting risks and opportunities grounded in quantitative and qualitative analysis.

Summary of Key Metrics as of 11 February 2026

• Mojo Score: 31.0 (Sell Grade)
• Return on Capital Employed (ROCE): 4.25%
• Net Sales Growth (5-year CAGR): 7.45%
• Debt to EBITDA Ratio: 14.55 times
• Cash and Cash Equivalents (HY): ₹0.88 crore
• Stock Returns: 1Y -8.24%, 6M -16.22%, 3M -16.58%, 1M -10.06%, 1W +3.17%, 1D 0.00%

These figures collectively underpin the current 'Sell' rating and provide a snapshot of the company’s financial and market standing.

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