Current Rating and Its Implications
MarketsMOJO’s Strong Sell rating for Responsive Industries Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its sector peers. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The Strong Sell grade, with a Mojo Score of 23.0, reflects concerns about the company’s recent performance and outlook, signalling that investors should carefully consider the risks before committing capital.
Rating Update Context
The rating was revised to Strong Sell on 05 January 2026, moving down from a Sell rating with a notable drop of 11 points in the Mojo Score (from 34 to 23). This adjustment was based on evolving company fundamentals and market conditions. It is important to note that while the rating change date is fixed, all financial data and returns referenced here are current as of 22 January 2026, ensuring that the analysis reflects the latest available information.
Here’s How Responsive Industries Ltd Looks Today
As of 22 January 2026, Responsive Industries Ltd remains a small-cap player in the Furniture and Home Furnishing sector. The stock has experienced significant downward pressure over recent periods, with returns showing a 33.18% decline over the past year. Year-to-date performance also remains negative at -13.98%, and the stock has underperformed the BSE500 index over the last one year, three months, and three years, indicating persistent challenges in both short and long-term horizons.
Quality Assessment
The company’s quality grade is assessed as average. While Responsive Industries Ltd maintains a presence in its sector, recent quarterly results have raised concerns. Net sales for the September 2025 quarter stood at ₹313.75 crores, reflecting a 12.6% decline compared to the previous four-quarter average. Operating profit to interest ratio has dropped to a low of 10.88 times, while interest expenses have risen to ₹7.04 crores, signalling increased financial strain. These factors suggest that the company’s operational efficiency and profitability are under pressure, impacting overall quality metrics.
Valuation Considerations
Valuation metrics currently classify Responsive Industries Ltd as expensive. The company’s return on capital employed (ROCE) is 13.9%, which, while positive, is not sufficiently high to justify its current valuation levels. The enterprise value to capital employed ratio stands at 2.9, indicating a premium valuation relative to capital base. Despite trading at a discount compared to some peers’ historical valuations, the stock’s price-to-earnings growth (PEG) ratio of 2.6 suggests that earnings growth expectations are not adequately matched by the current price, raising concerns about overvaluation in the context of deteriorating fundamentals.
Financial Trend Analysis
The financial grade for Responsive Industries Ltd is negative, reflecting a downward trajectory in key financial indicators. Although profits have risen by 8.6% over the past year, this improvement has not translated into positive stock returns or investor confidence. The negative trend is further underscored by the company’s declining sales and rising interest costs, which weigh on net profitability and cash flow generation. This mixed financial picture contributes to the cautious rating, as the company faces headwinds in sustaining growth and managing costs effectively.
Technical Outlook
From a technical perspective, the stock is graded bearish. Recent price movements show a consistent decline, with a 12.87% drop over the past month and a 6.78% fall in the last week. The one-day change on 22 January 2026 was a modest +0.20%, but this small uptick does little to offset the broader negative momentum. The bearish technical grade suggests that market sentiment remains weak, and the stock may continue to face selling pressure unless there is a significant change in fundamentals or sector dynamics.
Investor Takeaway
For investors, the Strong Sell rating on Responsive Industries Ltd serves as a warning signal. The combination of average quality, expensive valuation, negative financial trends, and bearish technicals indicates that the stock is currently not favoured for accumulation. Investors should weigh these factors carefully and consider alternative opportunities within the sector or broader market that offer stronger fundamentals and more attractive valuations.
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Sector and Market Context
The Furniture and Home Furnishing sector has faced mixed conditions recently, with some companies benefiting from rising demand while others struggle with input cost inflation and supply chain disruptions. Responsive Industries Ltd’s performance contrasts with some peers who have managed to sustain growth and profitability. The company’s small-cap status also means it is more vulnerable to market volatility and investor sentiment shifts, which is reflected in its underperformance relative to the broader BSE500 index.
Summary of Key Metrics as of 22 January 2026
To summarise, the stock’s returns over various periods highlight the challenges faced:
- 1 day: +0.20%
- 1 week: -6.78%
- 1 month: -12.87%
- 3 months: -6.52%
- 6 months: -29.07%
- Year-to-date: -13.98%
- 1 year: -33.18%
These figures underscore the sustained negative momentum and reinforce the rationale behind the Strong Sell rating.
What This Means for Investors
Investors should interpret the Strong Sell rating as a signal to exercise caution. It suggests that the stock is likely to continue facing headwinds and may not be suitable for those seeking capital appreciation or stable income in the near term. The rating also implies that the risk-reward profile is currently unfavourable, and investors might consider reducing exposure or avoiding new positions until there is a clear turnaround in fundamentals and market sentiment.
Conclusion
Responsive Industries Ltd’s current Strong Sell rating by MarketsMOJO, last updated on 05 January 2026, reflects a comprehensive assessment of the company’s average quality, expensive valuation, negative financial trends, and bearish technical outlook. As of 22 January 2026, the stock continues to underperform with significant declines in returns and weakening operational metrics. Investors are advised to carefully analyse these factors and consider the broader market environment before making investment decisions related to this stock.
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