Sangam Finserv Ltd Downgraded to Strong Sell Amid Weak Fundamentals and Bearish Technicals

Quality Assessment: Weak Fundamentals Continue to Weigh

Sangam Finserv’s fundamental quality remains under pressure, with the company reporting flat financial performance in the second quarter of FY25-26. Profit before tax excluding other income (PBT less OI) declined sharply by 39.38% to ₹1.97 crores, while profit after tax (PAT) fell by 24.1% to ₹1.89 crores. These results underscore the challenges the company faces in generating sustainable earnings growth.

Long-term financial strength is also lacking. The company’s average Return on Equity (ROE) stands at a modest 5.60%, signalling limited profitability relative to shareholder equity. Net sales have contracted at an annualised rate of -1.68%, while operating profit has declined by -9.32% annually, indicating a persistent erosion of core business performance. This weak fundamental profile is a key factor behind the downgrade to a Strong Sell rating.

Valuation: Fair but Premium Compared to Peers

From a valuation standpoint, Sangam Finserv trades at a Price to Book Value (P/BV) ratio of approximately 1.3, which is considered fair but slightly elevated relative to its peer group’s historical averages. While the company’s ROE of 5.8% suggests some value support, the premium valuation is difficult to justify given the lacklustre growth and profitability trends. The stock’s current price of ₹39.00 is significantly below its 52-week high of ₹69.56, reflecting market scepticism about its near-term prospects.

Technical Trend: Mixed Signals but Overall Bearish Shift

The downgrade was primarily triggered by a shift in technical grading from sideways to mildly bearish. Key technical indicators present a nuanced picture. On the weekly timeframe, the Moving Average Convergence Divergence (MACD) and Bollinger Bands signal mild bullishness, while the monthly MACD and KST (Know Sure Thing) indicators lean mildly bearish. The daily moving averages are mildly bearish, and the Dow Theory readings are mixed, with weekly data mildly bearish but monthly data mildly bullish.

Relative Strength Index (RSI) readings on both weekly and monthly charts show no clear signal, indicating a lack of strong momentum either way. The On-Balance Volume (OBV) data is inconclusive. Overall, these mixed technical signals have tilted the balance towards a cautious bearish stance, contributing to the downgrade in the technical grade and the overall Mojo Score falling to 26.0, which corresponds to a Strong Sell grade.

Financial Trend: Flat to Negative Growth Persists

Examining the financial trend over recent periods reveals a concerning pattern. The company’s quarterly results have been flat, with key profitability metrics declining. Year-to-date (YTD) returns for Sangam Finserv stand at a robust 35.18%, outperforming the Sensex which is down by 3.89% over the same period. However, this short-term gain masks longer-term underperformance.

Over the last one year, Sangam Finserv’s stock has declined by 23.20%, significantly underperforming the BSE500 index which has delivered a positive 6.30% return. This divergence highlights the company’s struggles to maintain investor confidence amid deteriorating earnings and weak operational momentum. Over longer horizons, the stock has delivered impressive returns — 264.83% over three years and 695.92% over ten years — but recent trends suggest caution.

Market Performance and Shareholding

The stock’s recent trading range has been volatile, with a 52-week low of ₹25.55 and a high of ₹69.56. On 22 Jan 2026, the stock closed at ₹39.00, down 2.06% from the previous close of ₹39.82. Intraday prices fluctuated between ₹39.00 and ₹42.00, reflecting investor uncertainty. The company’s market capitalisation grade is rated 4, indicating a mid-sized market cap within its sector.

Promoters remain the majority shareholders, maintaining control over strategic decisions. This concentrated ownership can be a double-edged sword, providing stability but also limiting liquidity and market responsiveness.

Summary and Outlook

The downgrade of Sangam Finserv Ltd to a Strong Sell rating by MarketsMOJO reflects a confluence of factors. The company’s weak fundamental profile, characterised by flat to negative growth, low ROE, and declining profitability, undermines investor confidence. Valuation metrics suggest the stock is trading at a premium relative to its peers despite these challenges.

Technically, the shift from a sideways to a mildly bearish trend, combined with mixed signals from key indicators such as MACD, Bollinger Bands, and moving averages, has further dampened sentiment. The stock’s underperformance relative to the broader market over the past year reinforces the cautious stance.

Investors should weigh these factors carefully, considering the company’s long-term historical returns against recent headwinds. While the NBFC sector offers opportunities, Sangam Finserv’s current profile suggests significant risks remain.

Key Metrics at a Glance:

• Mojo Score: 26.0 (Strong Sell, downgraded from Sell on 21 Jan 2026)


• Current Price: ₹39.00; 52-week High/Low: ₹69.56 / ₹25.55


• ROE: 5.60% (average), Price to Book Value: 1.3


• Q2 FY25-26 PBT less OI: ₹1.97 cr (-39.38%), PAT: ₹1.89 cr (-24.1%)


• 1-Year Stock Return: -23.20%; 1-Year BSE500 Return: +6.30%


• Technical Trend: Mildly Bearish (shift from sideways)

Given these insights, the Strong Sell rating is a reflection of both fundamental weaknesses and technical caution. Investors seeking exposure to the NBFC sector may wish to explore alternative opportunities with stronger momentum and more robust financials.

Unlock special upgrade rates for a limited period. Start Saving Now →