Relicab Cable Manufacturing Ltd is Rated Strong Sell

Current Rating and Its Implications

MarketsMOJO’s 'Strong Sell' rating for Relicab Cable Manufacturing Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The rating was revised on 22 December 2025, reflecting a decline in the overall Mojo Score from 32 to 29, signalling increased concerns about the company’s prospects.

Here’s How the Stock Looks Today

As of 25 December 2025, Relicab Cable Manufacturing Ltd remains a microcap player in the Other Electrical Equipment sector. The stock has experienced significant volatility, with a one-day decline of 2.25%, though it recorded a strong one-week gain of 25.98% and a one-month rise of 16.39%. Despite these short-term gains, the longer-term performance remains weak, with a three-month loss of 17.35%, six-month decline of 44.14%, year-to-date drop of 42.18%, and a one-year return of -46.39%. These figures highlight the stock’s ongoing challenges in delivering consistent shareholder value.

Quality Assessment

The company’s quality grade is assessed as below average. Over the past five years, Relicab Cable Manufacturing Ltd has achieved a compound annual growth rate (CAGR) of 13.52% in operating profits, which is modest but insufficient to offset other weaknesses. A critical concern is the company’s ability to service its debt, with an average EBIT to interest ratio of just 1.47, indicating limited earnings buffer to cover interest expenses. This financial strain is compounded by the fact that 99.94% of promoter shares are pledged, which can exert additional downward pressure on the stock price during market downturns.

Valuation Perspective

From a valuation standpoint, the stock is considered very attractive. This suggests that Relicab Cable Manufacturing Ltd is trading at a discount relative to its intrinsic value or sector peers. However, while an attractive valuation can present a buying opportunity, it must be weighed against the company’s fundamental weaknesses and market risks. Investors should be cautious, as low valuations may reflect underlying challenges rather than undervaluation alone.

Financial Trend Analysis

The financial grade for Relicab Cable Manufacturing Ltd is positive, indicating some favourable trends in recent financial performance. Despite the weak long-term fundamentals, the company has shown pockets of improvement or stability in its financial metrics. Nevertheless, this positive trend has not translated into sustained stock price appreciation, as evidenced by the negative returns over the past year and longer periods.

Technical Outlook

The technical grade is bearish, signalling that the stock’s price momentum and chart patterns are unfavourable. This bearish technical stance aligns with the stock’s recent underperformance and heightened volatility. Technical indicators suggest that the stock may continue to face downward pressure in the near term, reinforcing the cautious 'Strong Sell' rating.

Market and Peer Comparison

Relicab Cable Manufacturing Ltd has underperformed the BSE500 index over the last three years, one year, and three months, reflecting its struggles relative to the broader market. The combination of weak fundamentals, high promoter share pledging, and bearish technical signals has contributed to this underperformance. Investors should consider these factors carefully when evaluating the stock’s potential for recovery or growth.

What This Rating Means for Investors

The 'Strong Sell' rating advises investors to exercise caution with Relicab Cable Manufacturing Ltd. It suggests that the stock is likely to face continued headwinds and may not be suitable for risk-averse investors or those seeking stable returns. The rating reflects a combination of below-average quality, attractive valuation tempered by financial and technical weaknesses, and a challenging market environment. Investors should closely monitor the company’s financial health, debt servicing ability, and market developments before considering any position in the stock.

Summary

In summary, Relicab Cable Manufacturing Ltd’s current 'Strong Sell' rating by MarketsMOJO, updated on 22 December 2025, is grounded in a thorough analysis of its quality, valuation, financial trends, and technical outlook. While the stock’s valuation appears attractive, significant concerns around debt servicing, promoter share pledging, and bearish technical signals weigh heavily on its prospects. The stock’s recent performance and long-term underperformance relative to benchmarks further reinforce the cautious stance. Investors should approach this stock with prudence and consider the broader market context and company-specific risks.

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