Understanding the Current Rating
The Strong Sell rating assigned to Responsive Industries Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal.
Quality Assessment
As of 13 February 2026, Responsive Industries Ltd holds an average quality grade. This reflects a moderate level of operational efficiency and business stability. While the company maintains a presence in the furniture and home furnishing sector, recent quarterly results have shown signs of strain. For instance, net sales for the September 2025 quarter stood at ₹313.75 crores, marking a decline of 12.6% compared to the previous four-quarter average. Additionally, the operating profit to interest ratio has dropped to a low of 10.88 times, signalling increased financial pressure. The interest expense itself reached a quarterly high of ₹7.04 crores, further impacting profitability.
Valuation Considerations
The valuation grade for Responsive Industries Ltd is currently classified as expensive. Despite a return on capital employed (ROCE) of 13.9%, the company’s enterprise value to capital employed ratio stands at 3.2, indicating a premium valuation relative to its capital base. Although the stock trades at a discount compared to its peers’ historical averages, the price-to-earnings growth (PEG) ratio of 2.9 suggests that the market is pricing in relatively high growth expectations. This elevated valuation, combined with recent earnings volatility, warrants caution from investors seeking value opportunities.
Financial Trend Analysis
The financial grade for Responsive Industries Ltd is negative, reflecting recent challenges in sustaining growth momentum. While profits have increased by 8.6% over the past year, this has not translated into positive stock performance. The latest data shows the stock has delivered a negative return of 11.47% over the last 12 months, underperforming the broader BSE500 index, which has generated a 12.60% return in the same period. Year-to-date, the stock has declined by 4.80%, and over six months it has fallen 4.63%. These figures highlight the disconnect between earnings growth and market sentiment.
Technical Outlook
The technical grade is assessed as mildly bearish. Recent price action shows a 0.86% decline on the latest trading day, with a modest 1.33% gain over the past month offset by a sharper 8.64% drop over three months. This pattern suggests short-term volatility and a lack of sustained upward momentum. The stock’s inability to keep pace with sector or market rallies further reinforces the cautious technical stance.
Performance Summary
Responsive Industries Ltd’s stock performance as of 13 February 2026 paints a challenging picture for investors. The stock has underperformed significantly over the past year, with a negative return of 11.47%, contrasting sharply with the positive returns of the broader market. Despite some profit growth, the company’s operational and financial pressures, combined with an expensive valuation and subdued technical indicators, underpin the current Strong Sell rating.
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What This Rating Means for Investors
For investors, the Strong Sell rating on Responsive Industries Ltd serves as a signal to exercise caution. It suggests that the stock is likely to face headwinds in the near term, with risks outweighing potential rewards based on current data. Investors should consider the company’s operational challenges, elevated valuation, and subdued technical signals before committing capital. This rating does not imply an immediate sell-off but rather advises a conservative approach, possibly favouring alternative opportunities with stronger fundamentals and clearer growth trajectories.
Sector and Market Context
Operating within the furniture and home furnishing sector, Responsive Industries Ltd faces competitive pressures and cyclical demand fluctuations. The sector itself has seen mixed performance, with some companies benefiting from rising consumer spending while others grapple with input cost inflation and supply chain disruptions. Compared to the broader market, Responsive Industries Ltd’s underperformance highlights company-specific issues rather than sector-wide trends. Investors should weigh these factors alongside macroeconomic conditions when evaluating the stock.
Summary of Key Metrics as of 13 February 2026
- Market Capitalisation: Smallcap segment
- Mojo Score: 28.0 (Strong Sell)
- Quality Grade: Average
- Valuation Grade: Expensive
- Financial Grade: Negative
- Technical Grade: Mildly Bearish
- 1 Year Return: -11.47%
- Year-to-Date Return: -4.80%
- Quarterly Net Sales: ₹313.75 crores (down 12.6%)
- Operating Profit to Interest Ratio: 10.88 times (lowest)
- Interest Expense (Quarterly): ₹7.04 crores (highest)
- ROCE: 13.9%
- Enterprise Value to Capital Employed: 3.2
- PEG Ratio: 2.9
These figures collectively inform the current Strong Sell rating, reflecting a stock that is facing operational and valuation challenges amid a difficult market environment.
Investor Takeaway
Investors considering Responsive Industries Ltd should prioritise a thorough review of the company’s latest financial disclosures and market developments. The Strong Sell rating advises a defensive stance, with an emphasis on risk management and capital preservation. Monitoring upcoming quarterly results and sector trends will be crucial to reassessing the stock’s outlook in the coming months.
Conclusion
Responsive Industries Ltd’s current Strong Sell rating by MarketsMOJO, updated on 05 January 2026, reflects a comprehensive evaluation of the company’s present-day fundamentals, valuation, financial trends, and technical outlook as of 13 February 2026. While the company continues to operate in a competitive sector, its recent performance metrics and market behaviour suggest caution for investors. This rating serves as a guide to help investors make informed decisions based on the latest available data.
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