Rating Overview and Context
On 04 August 2025, MarketsMOJO revised Shivalik Rasayan Ltd’s rating from 'Strong Sell' to 'Sell', reflecting a modest improvement in the company’s overall assessment. The Mojo Score increased by 12 points, moving from 28 to 40, signalling a slightly less negative outlook. Despite this, the 'Sell' rating indicates that the stock remains unattractive for investors seeking capital appreciation or stable returns in the near term.
It is important to note that while the rating change occurred in August 2025, all financial data, returns, and fundamental analysis presented here are current as of 24 January 2026. This ensures that investors receive the most relevant and timely information to guide their decisions.
Current Fundamentals: Quality Assessment
As of 24 January 2026, Shivalik Rasayan Ltd’s quality grade is assessed as average. The company’s return on equity (ROE) stands at a modest 6.12%, indicating limited profitability relative to shareholders’ funds. This low ROE suggests that the company is not efficiently generating earnings from its equity base, which is a concern for investors prioritising quality and sustainable earnings growth.
Moreover, the company’s long-term growth trajectory has been underwhelming. Over the past five years, net sales have grown at an annualised rate of 12.50%, while operating profit has barely increased, registering a mere 0.55% growth rate. This sluggish financial trend points to challenges in scaling operations or improving margins in a competitive pesticides and agrochemicals sector.
Valuation: Attractive but Reflective of Risks
Despite the company’s average quality, Shivalik Rasayan Ltd’s valuation grade is currently very attractive. This suggests that the stock is trading at a price level that could appeal to value investors seeking bargains in microcap stocks. However, the attractive valuation is likely a reflection of the market’s cautious stance on the company’s fundamentals and growth prospects, as well as its recent price performance.
Investors should consider that a low valuation alone does not guarantee a positive investment outcome, especially when other factors such as financial trends and technical indicators are weak.
Financial Trend and Recent Performance
The financial grade for Shivalik Rasayan Ltd is flat, indicating stagnation in key financial metrics. The company reported a quarterly profit after tax (PAT) of ₹3.05 crores in September 2025, which represents a decline of 23.9% compared to previous quarters. This contraction in profitability raises concerns about the company’s ability to sustain earnings momentum.
Institutional investor participation has also waned, with a reduction of 0.83% in their stake over the previous quarter, leaving institutional holdings at just 4.02%. Given that institutional investors typically possess superior analytical resources, their declining interest may signal caution regarding the company’s outlook.
Technical Analysis: Bearish Momentum
From a technical perspective, the stock is graded as bearish. This is supported by its recent price performance, which has been notably weak. As of 24 January 2026, Shivalik Rasayan Ltd has delivered a negative return of 58.58% over the past year. The stock has also underperformed the BSE500 index over the last three years, one year, and three months, reflecting sustained downward pressure.
Shorter-term price movements further underline this bearish trend, with declines of 1.93% in one day, 4.62% over one week, and 15.24% in one month. The six-month return is particularly stark at -44.03%, underscoring the stock’s vulnerability to selling pressure and lack of positive catalysts.
What the 'Sell' Rating Means for Investors
The 'Sell' rating from MarketsMOJO suggests that investors should exercise caution with Shivalik Rasayan Ltd. While the valuation appears attractive, the combination of average quality, flat financial trends, and bearish technical signals indicates that the stock carries significant risks. Investors may face continued price volatility and limited upside potential in the near to medium term.
For those holding the stock, the recommendation implies a need to reassess their positions and consider alternatives with stronger fundamentals and more favourable technical setups. Prospective investors should weigh the risks carefully and monitor any developments that could improve the company’s financial health or market sentiment.
Sector and Market Context
Operating within the pesticides and agrochemicals sector, Shivalik Rasayan Ltd faces challenges typical of microcap companies, including limited liquidity and higher volatility. The sector itself is subject to regulatory changes, commodity price fluctuations, and demand variability linked to agricultural cycles. These factors compound the company-specific issues and contribute to the cautious stance reflected in the current rating.
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Investor Takeaway
In summary, Shivalik Rasayan Ltd’s current 'Sell' rating reflects a cautious outlook grounded in its average quality, very attractive valuation tempered by weak financial trends, and bearish technical indicators. The stock’s significant negative returns over the past year and declining institutional interest further reinforce the need for prudence.
Investors should closely monitor quarterly results and sector developments to identify any signs of turnaround. Until then, the recommendation suggests that capital preservation and risk management should take precedence over speculative buying in this microcap agrochemical stock.
Looking Ahead
Given the company’s flat financial performance and subdued growth prospects, any improvement in operational efficiency or profitability would be key to altering the current rating. Additionally, renewed institutional interest and a reversal in technical trends could provide positive momentum. Until such changes materialise, the 'Sell' rating remains a prudent guide for investors navigating this stock.
Summary of Key Metrics as of 24 January 2026
- Mojo Score: 40.0 (Sell Grade)
- Return on Equity (ROE): 6.12%
- Net Sales Growth (5-year CAGR): 12.50%
- Operating Profit Growth (5-year CAGR): 0.55%
- Quarterly PAT (Sep 2025): ₹3.05 crores, down 23.9%
- Institutional Holding: 4.02%, decreased by 0.83% last quarter
- Stock Returns: 1Y -58.58%, 6M -44.03%, 3M -25.19%, 1M -15.24%, 1W -4.62%, 1D -1.93%
The above data underscores the challenges facing Shivalik Rasayan Ltd and supports the current 'Sell' rating from MarketsMOJO.
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