Shalimar Paints Ltd. is Rated Strong Sell

Current Rating and Its Implications

MarketsMOJO’s Strong Sell rating on Shalimar Paints 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 based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The Strong Sell grade reflects concerns about the company’s operational performance, financial health, and market sentiment as of today.

Quality Assessment: Below Average Fundamentals

As of 02 January 2026, Shalimar Paints exhibits below-average quality metrics. The company has faced persistent operating losses, with operating profit declining at an annualised rate of -3.01% over the past five years. This weak long-term fundamental strength is further underscored by the company’s inability to comfortably service its debt obligations, as indicated by a negative EBIT to interest coverage ratio averaging -2.88. Such figures highlight ongoing operational challenges and raise questions about the sustainability of earnings and cash flows.

Valuation: Risky and Unfavourable

The stock’s valuation is currently considered risky. Despite a 23.9% rise in profits over the past year, Shalimar Paints’ share price has declined sharply, delivering a negative return of approximately -48.23% over the same period. This divergence suggests that the market perceives significant risks, possibly related to the company’s financial health and growth prospects. The stock trades at valuations that are unfavourable compared to its historical averages, signalling caution for value-conscious investors.

Financial Trend: Negative and Concerning

The latest financial data as of 02 January 2026 reveals a troubling trend. The company reported operating cash flow at its lowest level in recent years, with an operating cash flow of Rs -58.61 crores in the latest fiscal year. Interest expenses have increased by 22.96% over the last six months, reaching Rs 12.64 crores, while the debt-to-equity ratio has climbed to 0.67 times, the highest recorded in recent periods. These indicators point to deteriorating financial health and increased leverage, which heighten the risk profile for investors.

Technical Outlook: Bearish Momentum

From a technical perspective, Shalimar Paints is currently in a bearish phase. The stock has experienced significant declines over the past six months (-34.09%) and three months (-24.50%), reflecting negative market sentiment. Although there was a modest 11.25% gain over the past week and a 4.21% increase year-to-date, these short-term movements have not reversed the overall downward trend. The bearish technical grade suggests that the stock may continue to face selling pressure in the near term.

Additional Risk Factors

Investors should also be mindful of the high level of promoter share pledging, which currently stands at 61.35%. This proportion has increased by 3.67% over the last quarter. Elevated pledged shares can exert additional downward pressure on the stock price, especially in volatile or declining markets, as promoters may be forced to liquidate holdings to meet margin calls.

What This Means for Investors

For investors, the Strong Sell rating on Shalimar Paints Ltd. serves as a cautionary signal. The combination of weak operational performance, risky valuation, deteriorating financial trends, and bearish technical indicators suggests that the stock may continue to underperform in the foreseeable future. While some short-term price gains have been observed, the broader picture points to significant challenges that could impact shareholder value.

Investors should carefully consider these factors in the context of their portfolio risk tolerance and investment horizon. Those seeking stability and growth may prefer to avoid exposure to Shalimar Paints until there is clear evidence of a turnaround in fundamentals and financial health. Conversely, speculative investors might monitor the stock for potential recovery signals but should be prepared for volatility.

Summary of Key Metrics as of 02 January 2026

• Mojo Score: 3.0 (Strong Sell)


• Operating Profit Growth (5-year CAGR): -3.01%


• EBIT to Interest Coverage Ratio (Average): -2.88


• Operating Cash Flow (Latest Fiscal Year): Rs -58.61 crores


• Interest Expense Growth (6 months): +22.96%


• Debt-to-Equity Ratio (Half Year): 0.67 times


• Promoter Share Pledged: 61.35% (up 3.67% last quarter)


• Stock Returns: 1 Year -48.23%, 6 Months -34.09%, 3 Months -24.50%, 1 Week +11.25%, 1 Day -0.45%

In conclusion, the Strong Sell rating reflects a comprehensive assessment of Shalimar Paints Ltd.’s current challenges and risks. Investors should weigh these insights carefully when making decisions related to this stock.

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