Current Rating and Its Significance
MarketsMOJO’s 'Sell' rating for Super Tannery Ltd indicates a cautious stance towards the stock, suggesting that investors should consider reducing exposure or avoiding new purchases at this time. This rating 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 company’s investment potential and risk profile.
Quality Assessment
As of 21 February 2026, Super Tannery Ltd’s quality grade is classified as below average. This reflects concerns about the company’s long-term fundamental strength. The average Return on Capital Employed (ROCE) stands at a modest 7.13%, indicating limited efficiency in generating profits from its capital base. Over the past five years, net sales have grown at an annual rate of 8.11%, while operating profit has increased by 15.08% annually. Although these growth rates are positive, they are not sufficiently robust to inspire confidence in sustained expansion or competitive advantage.
Moreover, the company’s ability to service its debt is a notable weakness. With a Debt to EBITDA ratio of 3.39 times, Super Tannery carries a relatively high debt burden, which could constrain financial flexibility and increase vulnerability to economic downturns or rising interest rates. This debt profile contributes to the below-average quality rating and signals caution for investors prioritising financial stability.
Valuation Perspective
In contrast to the quality concerns, Super Tannery Ltd’s valuation grade is very attractive as of today. This suggests that the stock is trading at a price level that may offer value relative to its earnings, assets, or cash flow. For value-oriented investors, this presents a potential opportunity to acquire shares at a discount to intrinsic worth. However, the attractive valuation must be weighed against the company’s fundamental challenges and market risks.
Financial Trend Analysis
The financial grade for Super Tannery Ltd is currently flat, indicating a lack of significant improvement or deterioration in recent financial performance. The company reported flat results in the December 2025 quarter, with net sales at Rs 59.87 crores, the lowest quarterly figure observed recently. This stagnation in revenue growth raises questions about the company’s ability to generate momentum in the near term.
Additionally, the stock’s returns over various time frames highlight mixed performance. As of 21 February 2026, the stock has delivered a 1-day gain of 1.59% and a 1-month increase of 12.88%, suggesting some short-term positive momentum. However, longer-term returns are less encouraging, with a 6-month decline of 21.24% and a 1-year negative return of 31.61%. This underperformance is stark when compared to the broader market, as the BSE500 index has generated an 11.96% return over the same one-year period.
Technical Outlook
The technical grade for Super Tannery Ltd is mildly bearish as of today. This reflects cautious market sentiment and potential downward pressure on the stock price. While there have been short-term gains, the overall technical indicators suggest limited upside momentum and possible resistance levels that could hinder sustained rallies. Investors relying on technical analysis should monitor price trends closely before making trading decisions.
Market Capitalisation and Sector Context
Super Tannery Ltd is classified as a microcap company within the diversified consumer products sector. Microcap stocks often exhibit higher volatility and risk compared to larger, more established companies. The sector itself is broad, encompassing various consumer goods, which may dilute the company’s competitive positioning. Investors should consider these factors alongside the company’s financial and technical profiles when evaluating the stock.
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Implications for Investors
The 'Sell' rating on Super Tannery Ltd advises investors to exercise caution. While the stock’s valuation appears attractive, the underlying quality concerns, flat financial trend, and mildly bearish technical outlook suggest that risks currently outweigh potential rewards. Investors seeking capital preservation or growth may find better opportunities elsewhere, particularly given the stock’s significant underperformance relative to the broader market over the past year.
For those considering exposure, it is crucial to monitor the company’s debt levels and operational performance closely. Any improvement in sales growth, profitability, or debt servicing capacity could alter the investment thesis. Conversely, continued stagnation or deterioration may reinforce the current cautious stance.
Summary
In summary, Super Tannery Ltd’s current 'Sell' rating by MarketsMOJO, updated on 14 February 2026, reflects a balanced assessment of its below-average quality, very attractive valuation, flat financial trend, and mildly bearish technical signals. As of 21 February 2026, the stock’s recent returns and financial metrics underline the challenges it faces in regaining investor confidence and market momentum.
Investors should consider these factors carefully within the context of their portfolio objectives and risk tolerance before making decisions regarding Super Tannery Ltd.
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