Current Rating and Its Significance
MarketsMOJO's 'Sell' rating for Shakti Pumps (India) Ltd indicates a cautious stance for investors considering this stock at present. This recommendation is based on a detailed evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The rating, last revised on 06 Nov 2025, reflects a shift from a previous 'Hold' position, signalling that the stock currently exhibits characteristics that may not favour accumulation or holding for the near term.
It is important for investors to understand that this rating is not merely a label but a synthesis of multiple analytical dimensions that together suggest the stock's outlook and risk-reward profile as of today.
Here’s How Shakti Pumps Looks Today
As of 30 December 2025, Shakti Pumps (India) Ltd presents a mixed picture. The company operates within the Compressors, Pumps & Diesel Engines sector and is classified as a small-cap stock. The latest Mojo Score stands at 36.0, which corresponds to a 'Sell' grade, down from a previous score of 50 ('Hold'). This decline in score by 14 points reflects changes in the underlying fundamentals and market dynamics.
Quality Assessment
The quality grade for Shakti Pumps remains excellent, highlighting the company’s strong operational and business fundamentals. This suggests that the company maintains robust management practices, product quality, and competitive positioning within its sector. Investors can take comfort in the company's ability to sustain its core business and generate returns on capital efficiently.
Valuation Perspective
Despite the excellent quality, the valuation grade is classified as very expensive. The stock trades at a premium relative to its peers, with an enterprise value to capital employed ratio of 4.9 and a return on capital employed (ROCE) of 31.2%. This elevated valuation implies that the market has priced in significant growth expectations, which may not be fully justified given the current financial trends. The PEG ratio of 1.2 further indicates that the stock’s price is high relative to its earnings growth potential.
Financial Trend Analysis
The financial grade is negative, reflecting recent challenges in the company’s financial performance. Although profits have risen by 22.2% over the past year, the stock has underperformed the broader market significantly. As of 30 December 2025, Shakti Pumps has delivered a negative return of -32.37% over the last 12 months, while the BSE500 index has generated a positive return of 5.46% in the same period. This divergence suggests that despite profit growth, investor sentiment and market dynamics have weighed heavily on the stock price.
Technical Outlook
The technical grade is bearish, indicating that the stock’s price momentum and chart patterns are currently unfavourable. Recent price movements show a decline of 1.03% on the day, a 3.73% drop over the past week, and a 13.59% fall over the last three months. These trends suggest that short- to medium-term technical indicators do not support a bullish stance, reinforcing the 'Sell' rating.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Stock Performance and Market Comparison
Examining the stock’s returns as of 30 December 2025 reveals a challenging performance trajectory. The stock has declined by 33.66% year-to-date and 32.37% over the past year. Shorter-term returns also reflect volatility, with a 3.72% gain over the last month offset by losses of 25.35% over six months and 13.59% over three months. This underperformance contrasts sharply with the broader market, where the BSE500 index has posted positive returns, underscoring the stock’s relative weakness.
Implications for Investors
For investors, the 'Sell' rating suggests caution. While the company’s operational quality remains strong, the expensive valuation combined with negative financial trends and bearish technical signals indicate that the stock may face headwinds in the near term. Investors should carefully consider these factors before initiating or maintaining positions in Shakti Pumps (India) Ltd.
Sector and Market Context
Operating in the Compressors, Pumps & Diesel Engines sector, Shakti Pumps faces sector-specific challenges and opportunities. The current market environment, characterised by cautious investor sentiment towards small-cap stocks with stretched valuations, further influences the stock’s outlook. The premium valuation relative to peers suggests that expectations are high, and any deviation from anticipated growth could result in further price pressure.
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Summary
In summary, Shakti Pumps (India) Ltd’s current 'Sell' rating by MarketsMOJO reflects a comprehensive assessment of its present-day fundamentals and market conditions as of 30 December 2025. The company’s excellent quality is overshadowed by very expensive valuation, negative financial trends, and bearish technical indicators. Investors should weigh these factors carefully, recognising that the stock’s recent underperformance relative to the broader market signals potential risks ahead.
Maintaining awareness of ongoing developments and reassessing the stock’s position as new data emerges will be crucial for informed investment decisions.
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