Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating for Reliance Chemotex Industries Ltd indicates a cautious stance for investors, suggesting that the stock may underperform relative to the broader market or its sector peers. This rating was established on 25 August 2025, following a revision from a previous 'Strong Sell' grade, reflecting a modest improvement in the company’s overall assessment. The current Mojo Score stands at 37.0, up from 29, signalling some positive shifts but still indicating below-average prospects.
Here’s How the Stock Looks Today
As of 25 December 2025, Reliance Chemotex Industries Ltd remains a microcap player in the Garments & Apparels sector, with a mixed set of financial and market indicators. The stock’s recent price movements show a lack of momentum, with a day change of 0.0%, a one-week gain of 0.30%, but declines over longer periods including -5.26% in one month and -35.39% over the past year. These returns highlight the challenges the company faces in regaining investor confidence.
Quality Assessment
The company’s quality grade is categorised as below average. This is largely due to its weak long-term fundamental strength. The average Return on Capital Employed (ROCE) stands at 9.25%, which is modest and suggests limited efficiency in generating profits from capital investments. Over the last five years, net sales have grown at an annual rate of 8.44%, while operating profit has increased by 17.83% annually. Although these growth rates are positive, they are not sufficiently robust to offset concerns about the company’s operational efficiency and competitive positioning.
Valuation Perspective
From a valuation standpoint, Reliance Chemotex Industries Ltd is considered very attractive. This suggests that the stock is trading at a relatively low price compared to its earnings, book value, or cash flow metrics. For value-oriented investors, this could present an opportunity to acquire shares at a discount. However, the attractive valuation must be weighed against the company’s fundamental weaknesses and market risks.
Financial Trend Analysis
The financial grade for Reliance Chemotex is positive, indicating some encouraging trends in recent financial performance. Despite the challenges, the company has shown resilience in certain areas. However, a significant concern remains its high Debt to EBITDA ratio of 4.66 times, which points to a heavy debt burden and potential difficulties in servicing liabilities. This elevated leverage increases financial risk and could constrain future growth or profitability.
Register here to know the latest call on Reliance Chemotex Industries Ltd
- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Technical Outlook
The technical grade is mildly bearish, reflecting subdued price momentum and a lack of strong upward trends in the stock’s chart patterns. This technical stance aligns with the recent negative returns over one, three, and six months, as well as the year-to-date decline of -35.67%. Such trends suggest that short-term market sentiment remains cautious, and investors should be wary of potential further downside.
Comparative Performance and Market Context
Reliance Chemotex Industries Ltd has underperformed the BSE500 index over the past three years, one year, and three months. This relative weakness highlights the company’s struggles to keep pace with broader market gains and sector peers. The stock’s negative returns over the last year (-35.39%) and year-to-date (-35.67%) are particularly notable, signalling significant value erosion for shareholders.
Implications for Investors
For investors, the 'Sell' rating suggests a cautious approach. While the stock’s valuation appears attractive, the combination of below-average quality, financial leverage concerns, and bearish technical signals indicates that risks remain elevated. Investors should carefully consider these factors alongside their risk tolerance and investment horizon before taking a position in Reliance Chemotex Industries Ltd.
Our current monthly pick, this Mid Cap from Automobile Two & Three Wheelers, survived rigorous evaluation against dozens of contenders. See why experts are backing this one!
- - Rigorous evaluation cleared
- - Expert-backed selection
- - Mid Cap conviction pick
Summary
In summary, Reliance Chemotex Industries Ltd’s current 'Sell' rating by MarketsMOJO reflects a balanced view of its strengths and weaknesses as of 25 December 2025. The company’s very attractive valuation is offset by below-average quality, financial leverage concerns, and a mildly bearish technical outlook. Investors should approach the stock with caution, recognising the risks inherent in its financial and operational profile.
Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Today
