Technical Trend Shift Spurs Upgrade
The most significant catalyst behind the upgrade is the improvement in the technical grade. Previously characterised by a mildly bearish outlook, the technical trend has now shifted to mildly bullish. This change is reflected in several key technical indicators. The daily moving averages have turned bullish, signalling positive momentum in the short term. Meanwhile, monthly Bollinger Bands have moved to mildly bullish territory, suggesting a potential upward price movement over the medium term.
However, some weekly and monthly indicators remain cautious. The MACD (Moving Average Convergence Divergence) on both weekly and monthly charts continues to show mildly bearish signals, while the KST (Know Sure Thing) indicator remains mildly bearish on both timeframes. The Dow Theory weekly reading is mildly bearish, though the monthly chart shows no clear trend. The RSI (Relative Strength Index) on weekly and monthly charts currently provides no definitive signal, indicating a neutral momentum.
Despite these mixed signals, the overall technical sentiment has improved enough to warrant a grade upgrade. The stock price has responded positively, rising 4.95% on the day to ₹2.12 from a previous close of ₹2.02, with a 52-week range between ₹1.33 and ₹2.66.
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Valuation and Financial Trend Remain Weak
Despite the technical upgrade, Shivamshree Businesses Ltd’s valuation and financial trends continue to weigh heavily on its investment appeal. The company’s Mojo Score stands at 39.0, with a Mojo Grade of Sell, improved from a previous Strong Sell. The Market Cap Grade is a low 4, reflecting its relatively small market capitalisation and limited liquidity.
Financially, the company has exhibited a troubling long-term trend. Over the past five years, Shivamshree has recorded a negative compound annual growth rate (CAGR) of -168.43% in operating profits, signalling severe operational challenges. The average EBIT to interest coverage ratio is -0.24, indicating the company struggles to service its debt obligations effectively. This weak debt servicing ability raises concerns about financial stability and credit risk.
Profitability metrics are equally disappointing. The average Return on Equity (ROE) is a mere 0.05%, suggesting the company generates minimal returns on shareholders’ funds. Additionally, the company’s EBITDA has been negative, further underscoring operational inefficiencies and cash flow constraints.
Over the past year, the stock has generated a flat return of 0.00%, while profits have declined sharply by 76%. This contrasts starkly with the broader market, where the Sensex has delivered a 6.56% return over the same period. Longer-term comparisons are even more unfavourable, with Shivamshree’s 10-year return at -78.19% versus the Sensex’s robust 233.68% gain.
Recent Quarterly Performance Shows Some Positives
On a more encouraging note, the company reported positive financial performance in the second quarter of FY25-26. Net sales for the nine months ended September 2025 rose sharply by 79.21% to ₹8.62 crores. The PBDIT (Profit Before Depreciation, Interest and Taxes) for the quarter reached a high of ₹0.16 crores, while PBT (Profit Before Tax) excluding other income was recorded at a loss of ₹0.07 crores, the best in recent quarters.
These improvements suggest some operational stabilisation, although the company remains loss-making at the PBT level. The majority of shareholders remain non-institutional, which may limit the availability of strategic capital or support from large investors.
Stock Price and Market Returns in Context
Shivamshree’s stock price has shown modest resilience relative to the broader market. Over the past week, the stock returned 1.44%, outperforming the Sensex’s decline of 2.43%. Over one month and year-to-date periods, the stock’s returns of -2.3% and -1.85% respectively, while negative, still outperform the Sensex’s sharper declines of -4.66% and -4.32%. This relative outperformance may reflect the early stages of a technical recovery, which has contributed to the recent upgrade in the technical grade.
Summary of Ratings and Scores
As of 23 January 2026, MarketsMOJO assigns Shivamshree Businesses Ltd a Mojo Score of 39.0 and a Mojo Grade of Sell, upgraded from Strong Sell. The technical grade improvement from mildly bearish to mildly bullish was the primary driver of this change. However, the company’s weak long-term fundamentals, poor profitability, negative EBITDA, and risky valuation metrics continue to justify a cautious stance.
Investors should weigh the technical optimism against the underlying financial fragility before considering exposure to this stock. The company’s recent quarterly sales growth and improved PBDIT offer some hope, but the overall risk profile remains elevated.
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Investment Outlook
Shivamshree Businesses Ltd’s upgrade from Strong Sell to Sell reflects a nuanced view that balances technical improvements against persistent fundamental weaknesses. The mildly bullish technical indicators suggest potential for short-term price appreciation, but the company’s long-term financial health remains precarious. Investors should remain cautious and monitor upcoming quarterly results closely for signs of sustained operational turnaround.
Given the company’s negative EBITDA, poor debt servicing capacity, and negligible returns on equity, the stock remains a high-risk proposition. The recent sales growth and improved PBDIT are encouraging but insufficient to alter the overall negative financial trend. The stock’s relative outperformance against the Sensex in recent weeks may offer tactical trading opportunities but does not yet justify a more optimistic fundamental rating.
In conclusion, while the technical upgrade has improved the stock’s short-term outlook, Shivamshree Businesses Ltd continues to face significant challenges that warrant a Sell rating. Investors seeking exposure to the FMCG sector may consider alternative stocks with stronger financial profiles and more robust growth prospects.
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