Current Rating Overview
MarketsMOJO currently assigns Shiva Texyarn Ltd a 'Sell' rating, reflecting a cautious stance on the stock. This rating was revised from 'Strong Sell' on 05 January 2026, accompanied by a modest improvement in the Mojo Score from 29 to 32. Despite this slight upgrade in score, the recommendation remains negative, signalling that investors should approach the stock with prudence given prevailing market and company-specific conditions.
Understanding the Rating Components
The 'Sell' rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential and risk profile.
Quality Assessment
As of 03 February 2026, Shiva Texyarn Ltd’s quality grade is classified as below average. This reflects several fundamental challenges, including weak long-term growth and profitability metrics. The company has experienced a compound annual growth rate (CAGR) of -4.43% in net sales over the past five years, indicating a contraction in revenue rather than expansion. Additionally, the average Return on Equity (ROE) stands at a modest 4.38%, signalling limited profitability relative to shareholders’ funds. The company’s ability to service debt is also constrained, with a high Debt to EBITDA ratio of 10.25 times, suggesting elevated financial leverage and potential liquidity risks.
Valuation Perspective
In contrast to its quality challenges, Shiva Texyarn Ltd’s valuation grade is very attractive as of today. This suggests that the stock is trading at a relatively low price compared to its intrinsic value or sector peers, potentially offering a value opportunity for investors willing to accept the associated risks. However, attractive valuation alone does not offset the concerns raised by the company’s fundamental weaknesses and financial trends.
Financial Trend Analysis
The financial grade for Shiva Texyarn Ltd is positive, reflecting some encouraging signs in recent financial performance or balance sheet metrics. Despite the long-term sales decline, the company may be showing signs of stabilisation or improvement in certain financial ratios or cash flow generation. Nevertheless, this positive financial trend is not yet sufficient to outweigh the broader quality and technical concerns that influence the overall rating.
Technical Outlook
Technically, the stock is graded as bearish as of 03 February 2026. This is supported by recent price action and momentum indicators. The stock has delivered a negative return of -24.40% over the past year, underperforming the BSE500 index over multiple time frames including one year and three months. Shorter-term returns also reflect volatility and weakness, with a 1-month decline of -7.15% and a 6-month drop of -9.83%. Although the stock recorded a notable 6.83% gain on the most recent trading day, this is insufficient to reverse the prevailing downtrend.
Stock Performance Summary
As of 03 February 2026, Shiva Texyarn Ltd remains a microcap stock within the Garments & Apparels sector. Its recent price movements have been mixed, with a 1-day gain of 6.83% and a 1-week increase of 5.55%, but these short-term gains are overshadowed by longer-term declines. Year-to-date, the stock has fallen by 11.79%, reflecting ongoing investor caution. The combination of weak fundamentals, bearish technicals, and attractive valuation creates a complex investment profile that warrants careful consideration.
Implications for Investors
The 'Sell' rating indicates that MarketsMOJO advises investors to exercise caution with Shiva Texyarn Ltd at this time. The below-average quality and bearish technical outlook suggest that the stock may face continued headwinds. However, the very attractive valuation and positive financial trend imply that the stock could be undervalued relative to its potential, presenting a speculative opportunity for risk-tolerant investors who are comfortable with the company’s challenges.
Investors should closely monitor the company’s operational performance, debt servicing capacity, and market conditions before considering any position. The current rating reflects a balanced view that acknowledges both the risks and the potential value embedded in the stock.
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Sector and Market Context
Operating within the Garments & Apparels sector, Shiva Texyarn Ltd faces competitive pressures and cyclical demand patterns that influence its financial health. The sector has seen mixed performance recently, with some companies benefiting from export demand and others struggling with input cost inflation and supply chain disruptions. Shiva Texyarn’s microcap status adds an additional layer of volatility and liquidity risk, which investors should factor into their decision-making process.
Debt and Profitability Considerations
The company’s high Debt to EBITDA ratio of 10.25 times as of 03 February 2026 highlights significant leverage concerns. This level of indebtedness can constrain operational flexibility and increase vulnerability to interest rate fluctuations or economic downturns. Coupled with a low average ROE of 4.38%, the company’s ability to generate shareholder value remains limited. These factors weigh heavily on the quality grade and contribute to the cautious rating.
Long-Term Growth Challenges
Shiva Texyarn Ltd’s negative net sales CAGR of -4.43% over the last five years underscores persistent growth challenges. This contraction in revenue base suggests difficulties in expanding market share or adapting to changing industry dynamics. For investors, this signals the need for careful scrutiny of the company’s strategic initiatives and operational execution going forward.
Summary
In summary, Shiva Texyarn Ltd’s 'Sell' rating by MarketsMOJO as of 05 January 2026 reflects a nuanced view of the company’s current standing. While valuation and some financial trends offer a glimmer of opportunity, the overall quality and technical outlook remain weak. Investors should weigh these factors carefully and consider their risk tolerance before engaging with this stock.
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