Current Rating and Its Significance
MarketsMOJO currently assigns Refex Industries Ltd a 'Sell' rating, indicating a cautious stance towards the stock. This rating suggests that investors should consider reducing exposure or avoiding new purchases at present, based on a comprehensive evaluation of the company’s quality, valuation, financial trends, and technical indicators. The 'Sell' grade reflects a moderate level of concern about the stock’s near-term prospects, balanced against some stabilising factors compared to its previous 'Strong Sell' status.
Quality Assessment
As of 12 February 2026, Refex Industries Ltd holds an average quality grade. This assessment considers the company’s operational efficiency, profitability, and return metrics. The return on equity (ROE) stands at 14.1%, which is respectable but not exceptional within the chemical products sector. While the company has demonstrated some profit growth, the overall quality indicators suggest that Refex is maintaining steady but unspectacular performance levels. Investors should note that average quality implies the company is neither a standout performer nor severely underperforming in its operational fundamentals.
Valuation Considerations
The valuation grade for Refex Industries Ltd is classified as expensive. Currently, the stock trades at a price-to-book (P/B) ratio of 2.7, which is higher than the average for its peer group. Despite this, the stock is trading at a discount relative to its historical valuations, indicating some potential value if the company can improve its fundamentals. The price-earnings-to-growth (PEG) ratio is approximately 1, reflecting a balance between earnings growth and valuation. However, the expensive valuation grade signals that investors are paying a premium for the stock, which may not be justified given the company’s recent financial trends and market performance.
Financial Trend Analysis
The financial trend for Refex Industries Ltd is currently flat. The latest nine-month results ending December 2025 show net sales of ₹1,356.71 crores, representing a decline of 20.43% compared to the previous period. Meanwhile, interest expenses have increased by 28.62% to ₹21.93 crores, indicating rising financial costs. Despite these headwinds, the company’s profits have risen by 27.2% over the past year, suggesting some operational resilience. However, the flat financial grade reflects a lack of clear upward momentum in key financial metrics, which tempers optimism about near-term growth prospects.
Technical Outlook
From a technical perspective, Refex Industries Ltd is mildly bearish. The stock has underperformed the broader market significantly over the past year, delivering a negative return of -41.30% as of 12 February 2026. This contrasts sharply with the BSE500 index, which has generated a positive return of 12.62% over the same period. Short-term price movements show some recovery, with a 5.89% gain over the past week and a 5.39% increase in the last month, but these gains have not offset the steep declines seen over three and six months (-31.38% and -40.04%, respectively). The mild bearish technical grade suggests that while the stock may be attempting to stabilise, it remains vulnerable to further downside pressure.
Additional Risk Factors
Investors should also be aware of the elevated risk posed by promoter share pledging. Currently, 28.84% of promoter shares are pledged, an increase of 1.64% over the last quarter. High levels of pledged shares can exert downward pressure on stock prices, especially in volatile or falling markets, as forced selling may occur if margin calls arise. This factor adds to the cautious stance reflected in the 'Sell' rating.
Summary of Stock Returns
As of 12 February 2026, Refex Industries Ltd’s stock returns have been disappointing. The one-year return stands at -41.30%, with a six-month return of -40.04%. Year-to-date, the stock has declined by 5.23%. These figures highlight the stock’s significant underperformance relative to the broader market and sector peers, reinforcing the rationale behind the current rating.
Momentum building strong! This Mid Cap from NBFC is on our MomentumNow radar. Other investors are catching on – will you join?
- - Building momentum strength
- - Investor interest growing
- - Limited time advantage
What This Rating Means for Investors
The 'Sell' rating on Refex Industries Ltd advises investors to exercise caution. It suggests that the stock currently faces challenges that may limit its upside potential in the near term. The combination of average quality, expensive valuation, flat financial trends, and mildly bearish technicals indicates that the company is not positioned for strong growth or recovery at this time. Investors holding the stock should consider the risks associated with continued underperformance and the impact of pledged promoter shares.
For those considering new investments, the 'Sell' rating implies that alternative opportunities with better risk-reward profiles may be preferable. However, investors with a higher risk tolerance might monitor the stock for signs of fundamental improvement or technical reversal before making decisions.
Sector and Market Context
Operating within the 'Other Chemical products' sector, Refex Industries Ltd is classified as a small-cap company. The sector itself has experienced mixed performance, with some peers showing stronger growth and valuation metrics. The stock’s underperformance relative to the BSE500 index underscores the challenges it faces in competing effectively within its industry and the broader market environment.
Outlook and Considerations
Looking ahead, investors should closely watch Refex Industries Ltd’s upcoming quarterly results and any strategic initiatives aimed at improving sales growth and reducing financial costs. The company’s ability to manage promoter share pledging and enhance operational efficiency will be critical factors influencing its future rating and market performance.
In summary, the current 'Sell' rating reflects a balanced view of Refex Industries Ltd’s strengths and weaknesses as of 12 February 2026. While the company shows some resilience in profitability, the overall outlook remains cautious due to valuation concerns, flat financial trends, and technical pressures.
Unlock special upgrade rates for a limited period. Start Saving Now →
