Shri Bajrang Alliance Ltd Downgraded to Strong Sell Amid Technical and Fundamental Weakness

Quality Assessment: Weak Long-Term Fundamentals

Shri Bajrang Alliance Ltd’s quality rating remains subdued due to its underwhelming financial metrics. The company’s average Return on Capital Employed (ROCE) stands at a low 2.72%, signalling limited efficiency in generating profits from its capital base. This figure is considerably below industry averages, highlighting structural challenges in operational performance.

Quarterly results for Q2 FY25-26 have been flat, with net sales for the nine months ending September 2025 declining sharply by 41.18% to ₹257.17 crores. This contraction in top-line growth underscores the company’s struggle to maintain momentum in a competitive steel market. Additionally, the debtors turnover ratio for the half-year is at a low 11.25 times, indicating potential inefficiencies in receivables management.

Over the past year, the stock has generated a negative return of -7.90%, underperforming the BSE Sensex’s positive 9.56% gain. Even over a three-year horizon, the stock’s return of 0.92% pales in comparison to the Sensex’s robust 38.78% growth, reflecting persistent underperformance relative to broader market indices.

Valuation: Attractive but Potentially Misleading

Despite the weak fundamentals, Shri Bajrang Alliance Ltd’s valuation metrics appear compelling at first glance. The company’s ROCE of 1.1% is paired with a notably low Enterprise Value to Capital Employed (EV/CE) ratio of 0.6, suggesting the stock is trading at a discount relative to its capital base. This valuation is below the historical averages of its peers in the Iron & Steel Products sector, which may attract value-oriented investors.

However, the price-to-earnings growth (PEG) ratio stands at a high 4.6, indicating that earnings growth is not keeping pace with the stock price, which could temper enthusiasm. Over the past year, profits have inched up by a mere 0.9%, signalling stagnation in earnings despite the valuation discount. This disconnect between valuation and earnings growth warrants caution.

Financial Trend: Flat to Negative Momentum

The financial trend for Shri Bajrang Alliance Ltd has been largely flat to negative in recent quarters. The company’s net sales have contracted significantly, and profit growth remains negligible. This stagnation is reflected in the stock’s returns, which have lagged behind the broader market consistently over multiple time frames.

Specifically, the stock’s year-to-date return is -3.20%, compared to the Sensex’s -1.87%. Over the last month, the stock declined by 3.73%, underperforming the Sensex’s 1.92% fall. These figures highlight the stock’s vulnerability to market pressures and its inability to capitalise on sectoral tailwinds.

Longer-term returns tell a mixed story. While the five-year return of 153.58% outpaces the Sensex’s 68.97%, this is largely attributable to earlier periods of strength. The recent one-year and three-month underperformance signals a weakening trend that investors should monitor closely.

Technical Analysis: Shift to Bearish Sentiment

The downgrade to Strong Sell was primarily driven by a deterioration in technical indicators. The technical grade shifted from mildly bullish to bearish, reflecting a negative shift in market sentiment and price momentum.

Key technical signals include:

• MACD: Weekly readings are bearish, although monthly indicators remain mildly bullish, suggesting short-term weakness amid longer-term uncertainty.


• RSI: Both weekly and monthly Relative Strength Index readings show no clear signal, indicating a lack of strong momentum in either direction.


• Bollinger Bands: Bearish on both weekly and monthly charts, signalling increased volatility and downward pressure on prices.


• Moving Averages: Daily moving averages are bearish, confirming recent price declines.


• KST (Know Sure Thing): Weekly readings are bearish, while monthly remain mildly bullish, mirroring the MACD pattern.


• Dow Theory: Weekly mildly bearish, monthly mildly bullish, indicating mixed signals but a tilt towards short-term weakness.

On 14 January 2026, the stock closed at ₹186.00, down 1.69% from the previous close of ₹189.20. The 52-week high and low stand at ₹249.50 and ₹133.15 respectively, with the current price closer to the lower end of this range, reinforcing the bearish technical outlook.

Market Capitalisation and Shareholding

Shri Bajrang Alliance Ltd holds a Market Cap Grade of 4, indicating a relatively small market capitalisation within its sector. The majority shareholding is held by promoters, which can be a double-edged sword; while promoter control can ensure strategic continuity, it may also limit liquidity and influence market perception.

Comparative Performance and Outlook

When benchmarked against the Sensex and BSE500 indices, Shri Bajrang Alliance Ltd’s performance has been disappointing. The stock’s negative returns over the past year and underperformance over three years and three months highlight its challenges in delivering shareholder value consistently.

While the company’s five-year and ten-year returns of 153.58% and 582.57% respectively are impressive, these gains are overshadowed by recent weakness and deteriorating technicals. Investors should weigh these factors carefully before considering exposure to this stock.

Conclusion: Downgrade Reflects Heightened Risks

The downgrade of Shri Bajrang Alliance Ltd to a Strong Sell rating reflects a confluence of factors: weak long-term fundamentals, flat to negative financial trends, and a clear shift to bearish technical signals. Although the valuation appears attractive, the high PEG ratio and stagnant profit growth suggest that the discount may be justified by underlying risks.

Investors are advised to approach the stock with caution, considering alternative opportunities within the Iron & Steel Products sector that demonstrate stronger fundamentals and more favourable technical setups.

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