Sri Adhikari Brothers Television Network Ltd is Rated Sell

Understanding the Current Rating

The 'Sell' rating assigned to Sri Adhikari Brothers Television Network Ltd indicates a cautious stance for investors. It suggests that the stock may underperform relative to the broader market or sector peers in the near term. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential.

Quality Assessment: Below Average Fundamentals

As of 30 December 2025, the company’s quality grade remains below average. A significant concern is the high debt burden, with a debt-to-equity ratio standing at 10.91 times. This level of leverage indicates a weak long-term fundamental strength, as the company carries substantial financial risk. The ability to service this debt is limited, reflected in a poor EBIT to interest coverage ratio averaging -6.09, signalling that earnings before interest and taxes are insufficient to cover interest expenses.

Profitability metrics also highlight challenges. The average return on equity (ROE) is a modest 1.04%, indicating low profitability generated per unit of shareholders’ funds. This subdued profitability constrains the company’s capacity to generate value for investors and raises questions about operational efficiency and earnings sustainability.

Valuation: Very Expensive Relative to Capital Employed

The valuation grade for Sri Adhikari Brothers Television Network Ltd is classified as very expensive. The company’s return on capital employed (ROCE) is currently 3.4%, which is relatively low given the sector and market benchmarks. Despite this, the enterprise value to capital employed ratio is an elevated 342.9 times, suggesting that the stock price is high relative to the capital invested in the business.

This disparity between valuation and returns implies that investors are paying a premium for the stock that may not be justified by the company’s current earnings power or asset utilisation. Such a valuation level warrants caution, as it may limit upside potential and increase downside risk if operational performance does not improve.

Financial Trend: Flat Performance with Mixed Signals

The financial grade is currently flat, reflecting a lack of significant improvement or deterioration in recent results. The company reported flat results in the quarter ending September 2025, with no key negative triggers emerging from the latest financial disclosures. However, the overall financial trend remains subdued given the high leverage and limited profitability.

Despite these challenges, the company’s profits have risen by 102% over the past year, a positive sign of operational improvement. Yet, this profit growth has not translated into strong stock performance, as the stock has generated a negative return of -5.08% over the same period. This underperformance contrasts with the broader market, where the BSE500 index has delivered a 5.30% return in the last year, highlighting the stock’s relative weakness.

Technical Outlook: Bullish Momentum

On the technical front, the stock exhibits a bullish grade. Recent price movements show positive momentum, with the stock gaining 15.16% over the past month and an impressive 76.02% over the last three months. The six-month return stands at 64.75%, indicating strong short- to medium-term price appreciation despite the longer-term challenges.

However, the one-year return remains negative at -3.58%, and the year-to-date gain is a modest 1.50%. This mixed technical picture suggests that while there is some positive momentum, it may not be sufficient to offset the fundamental and valuation concerns that underpin the current 'Sell' rating.

What This Rating Means for Investors

For investors, the 'Sell' rating on Sri Adhikari Brothers Television Network Ltd serves as a cautionary signal. It suggests that the stock currently faces headwinds from a combination of high leverage, expensive valuation, and modest profitability. While technical indicators show some positive momentum, the fundamental and financial trends do not support a more optimistic outlook at this time.

Investors should carefully consider these factors before initiating or increasing exposure to this stock. The elevated debt levels and valuation premium imply heightened risk, and the company’s ability to generate sustainable returns remains uncertain. Those holding the stock may wish to monitor developments closely, particularly any improvements in debt servicing capacity or profitability that could alter the investment thesis.

Conversely, investors with a higher risk tolerance and a focus on short-term technical momentum might find opportunities in the recent price gains, but this approach carries inherent risks given the underlying fundamentals.

Summary of Key Metrics as of 30 December 2025

• Mojo Score: 44.0 (Sell Grade)


• Debt-Equity Ratio: 10.91 times (High leverage)


• EBIT to Interest Coverage: -6.09 (Weak ability to service debt)


• Return on Equity (avg): 1.04% (Low profitability)


• Return on Capital Employed: 3.4%


• Enterprise Value to Capital Employed: 342.9 (Very expensive valuation)


• Stock Returns: 1 Day -0.07%, 1 Month +15.16%, 3 Months +76.02%, 6 Months +64.75%, YTD +1.50%, 1 Year -3.58%


• Market Benchmark (BSE500) 1 Year Return: +5.30%

In conclusion, the 'Sell' rating on Sri Adhikari Brothers Television Network Ltd reflects a balanced view that weighs the company’s financial challenges and valuation concerns against some positive profit growth and technical momentum. Investors should approach this stock with caution and consider their investment horizon and risk appetite carefully.

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