Relicab Cable Manufacturing Ltd is Rated Sell

Current Rating and Its Significance

The 'Sell' rating assigned to Relicab Cable Manufacturing Ltd indicates a cautious stance for investors, suggesting that the stock may underperform relative to the broader market or its sector peers in the near to medium term. This rating is based on a comprehensive evaluation of multiple parameters, including the company’s quality, valuation, financial trend, and technical indicators. While the rating was revised on 29 December 2025, it is essential to understand that the current financial data as of 14 January 2026 continues to support this recommendation.

Quality Assessment

As of 14 January 2026, Relicab Cable Manufacturing Ltd’s quality grade remains below average. The company has demonstrated weak long-term fundamental strength, with a compound annual growth rate (CAGR) of operating profits at 13.52% over the past five years. Although this growth is positive, it is insufficient to offset other concerns. Notably, the company’s ability to service its debt is limited, reflected in a poor average EBIT to interest ratio of 1.47. This low coverage ratio signals vulnerability to interest rate fluctuations and potential liquidity pressures, which can weigh heavily on investor confidence.

Valuation Perspective

From a valuation standpoint, Relicab Cable Manufacturing Ltd appears very attractive as of today. The stock’s microcap status and depressed price levels have resulted in valuation metrics that may appeal to value-oriented investors seeking potential turnaround opportunities. However, attractive valuation alone does not guarantee positive returns, especially when other fundamental and technical factors remain unfavourable. Investors should weigh the valuation benefits against the risks posed by the company’s operational and financial challenges.

Financial Trend Analysis

The financial trend for Relicab Cable Manufacturing Ltd is currently positive, indicating some improvement or stability in recent financial performance. Despite this, the overall returns tell a more cautious story. The stock has delivered a negative 52.90% return over the past year and has underperformed the BSE500 index over the last three years, one year, and three months. Year-to-date, the stock has declined by 9.69%, and over the last six months, it has fallen by 48.10%. These figures highlight persistent challenges in generating shareholder value despite some positive financial trends.

Technical Outlook

Technically, the stock is rated bearish as of 14 January 2026. Recent price movements show a downward trajectory, with a one-day decline of 4.58% and a one-week drop of 7.20%. Although there was a modest one-month gain of 8.07%, the broader technical picture remains negative, reflecting weak market sentiment and selling pressure. This bearish technical grade suggests that short-term price momentum is unfavourable, which may deter momentum investors or traders looking for upward trends.

Additional Considerations

Investors should also be aware of significant risks related to promoter shareholding. Currently, 99.94% of promoter shares are pledged, which can exert additional downward pressure on the stock price in falling markets. High pledged shares often signal potential liquidity issues or financial stress within the promoter group, increasing the risk profile of the stock.

Furthermore, the company’s below-par performance in both the long and near term, combined with weak debt servicing capacity, underscores the challenges facing Relicab Cable Manufacturing Ltd. These factors contribute to the cautious 'Sell' rating, advising investors to approach the stock with prudence.

What This Rating Means for Investors

For investors, the 'Sell' rating on Relicab Cable Manufacturing Ltd serves as a cautionary signal. It suggests that the stock is expected to underperform or face continued headwinds in the foreseeable future. Investors holding the stock may consider reviewing their positions, especially given the stock’s weak technical momentum and the risks associated with high promoter pledge levels.

New investors should carefully evaluate the company’s fundamentals and market conditions before initiating positions. While the valuation appears attractive, the combination of below-average quality, bearish technicals, and financial risks means that the stock carries a higher risk profile. This rating encourages a defensive approach, favouring capital preservation over aggressive accumulation.

Summary of Key Metrics as of 14 January 2026

Relicab Cable Manufacturing Ltd’s Mojo Score stands at 32.0, reflecting the overall 'Sell' grade. The stock’s recent returns include a 1-day decline of 4.58%, a 1-week drop of 7.20%, and a 1-month gain of 8.07%. However, longer-term returns remain negative, with a 3-month loss of 26.08%, 6-month loss of 48.10%, and a 1-year loss of 52.90%. The company’s operating profit growth CAGR over five years is 13.52%, but debt servicing remains weak with an EBIT to interest ratio of 1.47. Promoter share pledging is nearly total at 99.94%, adding to the stock’s risk profile.

These figures collectively justify the current 'Sell' rating and provide a comprehensive picture for investors to consider in their decision-making process.

Looking Ahead

Investors should monitor upcoming quarterly results, debt servicing improvements, and any changes in promoter shareholding patterns to reassess the stock’s outlook. Improvements in technical indicators or a reduction in pledged shares could alter the risk profile and potentially lead to a reassessment of the rating in the future. Until then, the 'Sell' rating remains a prudent guide based on the current data.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →