Rating Overview and Context
On 14 October 2025, MarketsMOJO revised the rating for Saurashtra Cement Ltd from 'Hold' to 'Sell', reflecting a significant change in the company’s overall assessment. The Mojo Score, a composite indicator of the stock’s attractiveness, dropped by 23 points from 57 to 34, signalling a more cautious stance towards the stock. This rating encapsulates a comprehensive evaluation of the company’s quality, valuation, financial trend, and technical outlook.
Here’s How the Stock Looks Today
As of 23 January 2026, Saurashtra Cement Ltd remains a microcap player in the Cement & Cement Products sector, with a Mojo Grade firmly in the 'Sell' category. The stock’s recent price movements show a 1-day gain of 1.21%, but this short-term uptick contrasts with longer-term underperformance. Over the past year, the stock has delivered a negative return of -29.10%, underperforming the broader BSE500 index across multiple time frames including 3 months (-27.25%) and 6 months (-31.15%). This sustained weakness is a key factor in the current rating.
Quality Assessment
The company’s quality grade is assessed as average. This reflects a lack of strong growth drivers and operational challenges. Over the last five years, operating profit has declined at an annualised rate of -10.16%, indicating persistent difficulties in generating sustainable earnings growth. The latest quarterly results for September 2025 further underscore these challenges, with profit before tax excluding other income plunging to a loss of ₹22.31 crores, a dramatic fall of over 44,000% compared to the previous four-quarter average. Net profit after tax also declined sharply to a loss of ₹10.98 crores, down by 624.2%. These figures highlight the company’s struggle to maintain profitability and operational stability.
Valuation Considerations
Currently, the valuation grade is rated as fair. Despite the company’s microcap status and subdued growth prospects, the stock’s price does not appear excessively stretched relative to its fundamentals. However, the absence of dividend payments, with the latest annual dividend per share at zero, diminishes the appeal for income-focused investors. The fair valuation grade suggests that while the stock is not overvalued, it lacks compelling value propositions to attract new investors at this stage.
Financial Trend Analysis
The financial trend for Saurashtra Cement Ltd is flat, reflecting stagnation rather than improvement or deterioration. The company’s inability to generate positive earnings growth or improve cash flows over recent quarters signals a lack of momentum. This flat trend is a concern for investors seeking companies with upward financial trajectories, especially in a sector as competitive as cement manufacturing.
Technical Outlook
From a technical perspective, the stock is graded bearish. The downward trend in price over the medium to long term, combined with weak momentum indicators, suggests limited near-term upside potential. The stock’s performance relative to sector peers and broader market indices confirms this bearish stance, reinforcing the rationale behind the 'Sell' rating.
Additional Market Insights
Notably, domestic mutual funds hold no stake in Saurashtra Cement Ltd, which may indicate a lack of confidence from institutional investors who typically conduct thorough on-the-ground research. This absence of institutional backing further weighs on the stock’s attractiveness and liquidity.
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What the 'Sell' Rating Means for Investors
For investors, the 'Sell' rating on Saurashtra Cement Ltd signals caution. It suggests that the stock currently carries a higher risk profile due to weak financial performance, lack of growth, and negative technical signals. Investors should carefully consider these factors before initiating or maintaining positions in the stock. The rating implies that better opportunities may exist elsewhere in the cement sector or broader market, especially given the company’s ongoing operational challenges and subdued outlook.
Sector and Market Context
Within the Cement & Cement Products sector, companies with stronger growth prospects, healthier financial trends, and more favourable valuations are likely to attract investor interest. Saurashtra Cement Ltd’s microcap status and limited institutional participation further reduce its visibility and appeal. The stock’s recent underperformance relative to the BSE500 index highlights the competitive pressures and structural issues it faces.
Summary
In summary, Saurashtra Cement Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 14 October 2025, reflects a comprehensive assessment of its average quality, fair valuation, flat financial trend, and bearish technical outlook. As of 23 January 2026, the stock continues to underperform with negative returns and weak fundamentals. Investors should approach the stock with caution and consider alternative investments with stronger growth and financial profiles.
Looking Ahead
While the company’s current position is challenging, any future improvement in operational efficiency, profitability, or market conditions could warrant a reassessment of its rating. For now, the 'Sell' recommendation serves as a prudent guide for investors to manage risk and seek more promising opportunities within the sector.
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