Shricon Industries Ltd Upgraded to Hold by MarketsMOJO on Improved Technicals and Financials

Technical Trend Upgrade Spurs Rating Change

The primary catalyst for the upgrade was a marked improvement in the technical outlook. The technical grade shifted from mildly bullish to bullish, supported by several key indicators. On a weekly and monthly basis, the Moving Average Convergence Divergence (MACD) remains bullish, reinforcing positive momentum. The Relative Strength Index (RSI) currently shows no clear signal, suggesting the stock is not overbought or oversold, which can be favourable for sustained movement.

Bollinger Bands indicate a mildly bullish stance weekly and a bullish trend monthly, while daily moving averages confirm a bullish trajectory. However, some mixed signals remain, such as the Know Sure Thing (KST) indicator showing mildly bearish trends on both weekly and monthly charts, and the On-Balance Volume (OBV) reflecting mildly bearish sentiment monthly despite a mildly bullish weekly reading. The Dow Theory also supports a mildly bullish outlook on both timeframes.

These technical nuances suggest that while the stock is gaining upward momentum, some caution is warranted due to minor bearish signals. Nonetheless, the overall technical environment has improved sufficiently to justify the upgrade in rating.

Financial Trend: Strong Quarterly and Long-Term Performance

Shricon Industries has demonstrated solid financial results in the recent quarter Q3 FY25-26, which have contributed to the positive reassessment. The company reported its highest quarterly PBDIT at ₹1.38 crores and PBT excluding other income also peaked at ₹1.38 crores. The profit after tax (PAT) for the nine months ending December 2025 stood at ₹1.71 crores, reflecting a significant improvement in profitability.

Long-term financial metrics further bolster confidence. The company maintains a strong average Return on Equity (ROE) of 21.14%, indicating efficient capital utilisation. Net sales have grown at an impressive compounded annual growth rate (CAGR) of 35.28%, while operating profit has expanded at 25.31% annually. These figures underscore a healthy growth trajectory and operational strength within the NBFC sector.

Moreover, Shricon Industries has consistently outperformed the broader market benchmarks. Over the last one year, the stock has delivered a return of 45.83%, significantly outpacing the BSE500’s negative 7.86% return. Over three and five years, the stock’s returns have been extraordinary at 661.60% and 649.61% respectively, dwarfing the Sensex’s 21.79% and 48.76% gains over the same periods. Even on a decade-long horizon, the stock has surged by 1176.14%, compared to the Sensex’s 197.15%.

Valuation: Expensive Yet Justified by Growth

Despite the strong fundamentals, Shricon Industries carries a valuation that is considered very expensive by traditional metrics. The company’s ROE of 38.8% is paired with a Price to Book (P/B) ratio of 6.4, signalling a premium valuation. However, this elevated valuation is somewhat justified by the company’s rapid profit growth, which has increased by 173% over the past year.

The Price/Earnings to Growth (PEG) ratio stands at zero, indicating that the stock’s price growth is in line with its earnings growth, a positive sign for investors seeking growth at a reasonable price. Relative to its peers, Shricon trades at a fair value when considering historical averages, suggesting that while expensive, the stock is not excessively overvalued within its sector context.

Quality Assessment: Promoter Stability and Market Position

The company’s ownership structure is dominated by promoters, which often implies stable management and aligned interests with shareholders. Shricon Industries operates within the NBFC sector, a competitive but growing segment of the Indian financial services industry. Its micro-cap status means it is more volatile and less liquid than larger peers, but the consistent returns and strong fundamentals mitigate some of these risks.

Its Mojo Score stands at 50.0 with a Mojo Grade of Hold, upgraded from a previous Sell rating. This reflects a balanced view of the company’s prospects, recognising both the improved technical momentum and solid financial health, while acknowledging valuation concerns and some mixed technical signals.

Technical Price Action and Market Context

On 22 May 2026, Shricon Industries closed at ₹238.00, up 4.57% from the previous close of ₹227.60. The stock traded within a range of ₹216.25 to ₹238.95 during the day, approaching its 52-week high of ₹278.00, well above its 52-week low of ₹122.55. This price action reflects renewed investor interest and confidence in the stock’s near-term prospects.

Comparatively, the Sensex has underperformed Shricon significantly over multiple timeframes, highlighting the stock’s strong relative momentum. While the stock experienced a 5.14% decline over the past week, it rebounded strongly over the last month with a 27.92% gain, underscoring volatility but also resilience.

Conclusion: A Balanced Hold Recommendation

The upgrade of Shricon Industries Ltd’s rating from Sell to Hold is a reflection of improved technical indicators, strong quarterly and long-term financial performance, and a valuation that, while expensive, is supported by rapid earnings growth. Investors should note the mixed technical signals and the micro-cap nature of the stock, which can entail higher volatility.

Overall, the Hold rating suggests that while the stock is no longer a sell, it may not yet be a compelling buy at current levels. Investors with a medium to long-term horizon who appreciate the company’s growth story and technical momentum may consider accumulating selectively, while others may prefer to monitor for further confirmation of sustained bullish trends.

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