Shilp Gravures Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO's 'Sell' rating for Shilp Gravures Ltd indicates a cautious stance towards the stock, suggesting that investors should consider reducing exposure or avoiding new purchases at this time. This rating is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. The rating was revised on 17 Nov 2025, reflecting a decline in the Mojo Score from 51 to 37, signalling a shift in the stock’s overall attractiveness.

How the Stock Looks Today: Quality Assessment

As of 09 February 2026, Shilp Gravures Ltd holds an average quality grade. The company’s long-term growth has been modest, with net sales increasing at an annualised rate of 7.77% over the past five years. Operating profit growth has been even more subdued, at 3.87% annually during the same period. These figures suggest that while the company is growing, it is doing so at a pace that may not be compelling enough to attract growth-focused investors.

Valuation Considerations

The stock is currently classified as expensive, trading at a price-to-book value of 1.1, which is a premium relative to its peers’ historical valuations. Despite this premium, the company’s return on equity (ROE) remains low at 2.7%, indicating limited efficiency in generating profits from shareholder equity. This disparity between valuation and profitability raises concerns about the stock’s price sustainability, especially given the subdued growth metrics.

Financial Trend and Profitability

Financially, Shilp Gravures Ltd shows a positive trend. The latest data reveals a significant 41.7% increase in profits over the past year, a notable improvement despite the stock’s negative price returns. The price-to-earnings-to-growth (PEG) ratio stands at 0.3, which typically signals undervaluation relative to earnings growth. However, this positive financial trend has not translated into share price appreciation, with the stock delivering a -36.08% return over the last year as of 09 February 2026.

Technical Analysis and Market Sentiment

Technically, the stock is rated bearish. Recent price movements show a decline of 0.16% on the latest trading day, with a one-month return of -7.54% and a three-month return of -23.40%. The downward momentum is further reflected in six-month and year-to-date returns, both negative by over 23% and 13% respectively. This bearish technical outlook suggests that market sentiment remains weak, potentially limiting near-term upside.

Summary of Current Position

In summary, Shilp Gravures Ltd’s 'Sell' rating is supported by a combination of average quality, expensive valuation, positive but insufficient financial trends, and bearish technical indicators. For investors, this rating implies that the stock may face continued headwinds and that caution is warranted. The company’s improving profitability is a positive sign, but it has yet to be reflected in the share price or valuation metrics.

Investor Implications and Outlook

For investors, understanding the rationale behind the 'Sell' rating is crucial. The average quality and positive financial trend offer some hope for a turnaround, but the expensive valuation and bearish technical signals suggest that the stock may remain under pressure in the near term. Investors should weigh these factors carefully against their risk tolerance and portfolio objectives.

Given the stock’s microcap status and sector classification within Industrial Products, liquidity and market volatility may also be considerations. The stock’s recent performance, with a one-year return of -36.08%, highlights the challenges faced by shareholders. However, the profit growth of 41.7% over the same period indicates operational improvements that could eventually support a re-rating if sustained.

Comparative Context

Compared to broader market benchmarks and sector peers, Shilp Gravures Ltd’s valuation premium and low ROE stand out as areas of concern. While some microcap stocks may command higher valuations due to growth potential, the company’s modest sales and profit growth rates temper enthusiasm. The PEG ratio of 0.3 suggests that the market may be undervaluing the company’s earnings growth, but this has not yet translated into positive price momentum.

Conclusion

In conclusion, the 'Sell' rating for Shilp Gravures Ltd reflects a balanced assessment of its current fundamentals and market position as of 09 February 2026. Investors should approach the stock with caution, recognising the risks posed by valuation and technical factors despite encouraging profit growth. Monitoring future earnings reports and market developments will be essential to reassess the stock’s potential.

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