Shree Pushkar Chemicals & Fertilizers Ltd Downgraded to Sell Amid Mixed Financial and Technical Signals

Financial Trend: Positive Yet Moderating Momentum

The company’s financial trend, previously rated as very positive, has been downgraded to positive. While Shree Pushkar Chemicals reported encouraging growth in net sales and profits for the six months ending December 2025, the momentum has slowed compared to the previous quarter. Net sales surged by 28.34% to ₹503.95 crores, and profit after tax (PAT) rose 24.04% to ₹36.27 crores, signalling solid top-line and bottom-line expansion.

Return on capital employed (ROCE) remains healthy at 12.42%, indicating efficient capital utilisation. However, some operational metrics have deteriorated. The debtors turnover ratio has fallen to a low of 4.44 times, suggesting slower collection cycles. Quarterly PBDIT dropped to ₹22.07 crores, with operating profit to net sales ratio declining to 8.87%, reflecting margin pressures. Profit before tax excluding other income also slipped to ₹15.44 crores. These factors collectively contributed to the financial trend score falling from 20 to 7 over the past three months, signalling a moderation in financial strength.

Valuation: Fair but Premium Compared to Peers

Shree Pushkar Chemicals trades at a premium valuation relative to its industry peers, with a price-to-book value of 2 and a return on equity (ROE) of 12.4%. The company’s PEG ratio stands at 0.5, indicating that earnings growth is favourable relative to its price. Over the past year, the stock has delivered a 10.96% return, outperforming the Sensex’s 8.52% gain, while profits have increased by 33.7%. Despite these positives, the premium valuation may limit upside potential, especially given the operational challenges and subdued institutional interest.

Notably, domestic mutual funds hold no stake in the company, which is unusual for a firm of its size and consistent performance. This absence of institutional backing may reflect concerns about the stock’s price or business fundamentals, adding a layer of caution for investors.

Quality Assessment: Mixed Operational Efficiency

While the company has demonstrated consistent positive financial results for seven consecutive quarters, certain quality metrics raise concerns. The low debt-to-equity ratio of 0.04 times reflects a conservative capital structure, which is favourable. However, the decline in operational profitability ratios and debtor turnover suggests challenges in working capital management and cost control.

These operational inefficiencies could impact the company’s ability to sustain growth and profitability in a competitive dyes and pigments industry. The quality grade remains under pressure due to these factors, contributing to the overall downgrade in investment rating.

Technical Indicators: Shift to Mildly Bearish Signals

Technical analysis of Shree Pushkar Chemicals reveals a shift from mildly bullish to mildly bearish trends. Weekly MACD and KST indicators are bearish, while monthly signals remain bullish, indicating mixed momentum across timeframes. The Relative Strength Index (RSI) shows no clear signal on both weekly and monthly charts, suggesting indecision among traders.

Bollinger Bands on the weekly chart are mildly bearish, with the stock price fluctuating between ₹337.00 and ₹416.45 on the day of analysis, well below its 52-week high of ₹476.60. Daily moving averages also indicate a mildly bearish trend, signalling potential short-term weakness. On balance, these technical factors have contributed to a downgrade in the technical grade, reinforcing a cautious outlook.

Stock Performance Relative to Sensex

Over various time horizons, Shree Pushkar Chemicals has outperformed the Sensex significantly. The stock posted a 1-week return of 8.39% versus the Sensex’s -1.14%, and a 1-month return of 7.47% compared to Sensex’s -1.20%. Over three and five years, the stock’s returns of 104.27% and 152.20% respectively far exceed the Sensex’s 36.73% and 60.30%. However, year-to-date performance is negative at -8.92%, underperforming the Sensex’s -3.04%, reflecting recent volatility and uncertainty.

Conclusion: A Cautious Stance Amid Contrasting Signals

The downgrade of Shree Pushkar Chemicals & Fertilizers Ltd’s investment rating to Sell reflects a balanced assessment of its current standing. The company’s strong sales growth, consistent profitability, and conservative capital structure are positive attributes. However, operational inefficiencies, a decline in key profitability ratios, subdued institutional interest, and mixed technical signals have raised caution flags.

Investors should weigh the company’s premium valuation against these risks and monitor upcoming quarterly results for signs of operational improvement or further deterioration. Given the current outlook, a cautious approach is warranted, with a preference for closely tracking peer performance and market developments in the dyes and pigments sector.

About MarketsMOJO Ratings

The MarketsMOJO rating system integrates multiple parameters including financial health, valuation, technical trends, and quality metrics to provide a comprehensive investment grade. Shree Pushkar Chemicals & Fertilizers Ltd’s current Mojo Score stands at 45.0, with a Sell grade, reflecting the aggregate assessment of these factors as of 13 February 2026.

Stock Snapshot

Current Price: ₹359.00 | Previous Close: ₹349.60 | 52-Week High: ₹476.60 | 52-Week Low: ₹221.10

Market Cap Grade: 4 | Industry: Dyes And Pigments | Sector: Dyes And Pigments

Investment Implications

While the company’s long-term returns have been impressive, recent signs of operational strain and technical weakness suggest that investors should exercise prudence. The absence of domestic mutual fund participation further underscores the need for careful due diligence before committing fresh capital.

Looking Ahead

Future performance will hinge on the company’s ability to improve operational efficiency, maintain sales momentum, and navigate sectoral challenges. Monitoring quarterly financials and technical developments will be crucial for investors seeking to reassess the stock’s potential.

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