Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Sunrakshakk Industries India Ltd indicates a balanced view of the stock’s prospects. It suggests that while the company demonstrates solid financial health and growth potential, certain valuation and technical factors advise caution. Investors are encouraged to maintain their existing positions rather than aggressively buying or selling at this stage. This rating reflects a nuanced assessment based on multiple parameters including quality, valuation, financial trends, and technical analysis.
Quality Assessment: Average Fundamentals with Strong Profit Growth
As of 13 February 2026, Sunrakshakk Industries exhibits an average quality grade. The company’s ability to service debt remains robust, with a low Debt to EBITDA ratio of 0.91 times, indicating manageable leverage and financial stability. Net sales have demonstrated impressive growth, expanding at an annual rate of 53.70%, signalling strong demand and operational efficiency within the garments and apparels sector.
Moreover, the company’s net profit has surged by 212.16%, underscoring effective cost management and margin improvement. Quarterly results for September 2025 reinforce this positive trend, with net sales reaching ₹120.97 crores, a 72.1% increase compared to the previous four-quarter average. Profit before depreciation, interest, and taxes (PBDIT) hit a high of ₹11.67 crores, while profit before tax excluding other income (PBT less OI) also peaked at ₹7.87 crores. These figures highlight the company’s operational strength and growing profitability.
Valuation: Very Expensive but Trading at a Relative Discount
Despite strong financial performance, the valuation grade for Sunrakshakk Industries is classified as very expensive. The company’s return on capital employed (ROCE) stands at 7.3%, while the enterprise value to capital employed ratio is 4.2, reflecting a premium valuation relative to its capital base. The price-to-earnings growth (PEG) ratio is notably high at 12.9, suggesting that the stock price has outpaced earnings growth substantially.
However, it is important to note that the stock is trading at a discount compared to its peers’ average historical valuations. This relative valuation gap may offer some cushion for investors, although the premium absolute valuation warrants careful consideration before initiating new positions.
Financial Trend: Very Positive Momentum and Consistent Returns
The financial trend for Sunrakshakk Industries is very positive, supported by consistent growth in sales and profits. The company has delivered strong returns over multiple time frames: a 64.18% gain over the past year, 27.44% year-to-date, and double-digit growth across one-month, three-month, and six-month periods. This performance notably outpaces the BSE500 index in each of the last three annual periods, demonstrating resilience and market outperformance despite its microcap status.
Such consistent returns reflect the company’s ability to capitalise on growth opportunities within the garments and apparels sector, while maintaining operational discipline and financial prudence.
Technical Analysis: Sideways Movement Suggests Consolidation
From a technical perspective, the stock is graded as sideways, indicating a phase of consolidation rather than a clear upward or downward trend. The one-day price change as of 13 February 2026 was -0.71%, while the one-week and one-month returns were positive at +10.33% and +10.36% respectively. This pattern suggests that while the stock has experienced recent gains, it is currently stabilising, which may reflect investor caution amid the expensive valuation.
For investors, this sideways technical grade implies that the stock may not offer immediate breakout potential but could be poised for gradual appreciation if underlying fundamentals continue to improve.
Additional Considerations for Investors
Despite the company’s strong financial metrics and growth trajectory, domestic mutual funds hold no stake in Sunrakshakk Industries as of the current date. Given that mutual funds typically conduct thorough on-the-ground research, their absence may indicate reservations about the stock’s valuation or business model at prevailing prices. This factor adds a layer of caution for investors considering new exposure.
Nevertheless, the company’s microcap status and recent performance have attracted attention from other market participants, as evidenced by its inclusion in thematic lists and the steady appreciation in share price over the past year.
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Summary for Investors
Sunrakshakk Industries India Ltd’s current 'Hold' rating reflects a balanced investment stance. The company’s strong financial trend and quality fundamentals are tempered by a very expensive valuation and sideways technical movement. Investors holding the stock may consider maintaining their positions to benefit from ongoing growth, while new investors should weigh the premium valuation against the company’s growth prospects and market positioning.
Given the stock’s microcap status and absence of domestic mutual fund participation, a cautious approach is advisable. Monitoring future quarterly results and valuation shifts will be key to reassessing the stock’s attractiveness over time.
About Sunrakshakk Industries India Ltd
Operating within the garments and apparels sector, Sunrakshakk Industries India Ltd is a microcap company that has demonstrated notable growth in sales and profits over recent periods. Its financial discipline, low leverage, and consistent returns have positioned it as a noteworthy player in its segment, despite valuation challenges.
Performance Snapshot as of 13 February 2026
The stock has delivered a 64.18% return over the past year, with positive momentum continuing year-to-date at 27.44%. Quarterly sales and profit metrics remain robust, supporting the company’s very positive financial grade. However, valuation metrics such as the PEG ratio and enterprise value to capital employed suggest the stock is priced at a premium relative to earnings growth and capital utilisation.
Investors should consider these factors carefully when evaluating Sunrakshakk Industries India Ltd as part of their portfolio strategy.
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