Understanding the Current Rating
The Strong Sell rating assigned to Super Tannery Ltd indicates a cautious stance for investors, signalling that the stock is expected to underperform relative to the broader market and its peers. This recommendation is derived from a detailed 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 appeal and risk profile.
Quality Assessment
As of 19 January 2026, Super Tannery Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with an average Return on Capital Employed (ROCE) of just 7.13%. While the net sales have grown at an annual rate of 11.11% over the past five years, operating profit growth at 14.65% has not been sufficient to establish robust profitability. Furthermore, the company’s ability to service debt is limited, evidenced by a high Debt to EBITDA ratio of 3.39 times. This elevated leverage heightens financial risk, especially in volatile market conditions.
Valuation Perspective
Despite the challenges in quality and financial health, the valuation grade for Super Tannery Ltd is currently very attractive. This suggests that the stock is trading at a price level that could offer value relative to its earnings and asset base. However, attractive valuation alone does not offset the risks posed by weak fundamentals and deteriorating financial trends. Investors should consider valuation in conjunction with other factors before making investment decisions.
Financial Trend Analysis
The financial trend for Super Tannery Ltd is negative as of today. Recent quarterly results show a significant decline in profitability, with Profit After Tax (PAT) falling by 64.9% compared to the previous four-quarter average, registering at Rs 0.69 crore. Net sales in the latest quarter are at their lowest level of Rs 62.15 crore, while Profit Before Tax excluding other income (PBT less OI) also hit a low of Rs 0.53 crore. These figures highlight a deteriorating operational performance and raise concerns about the company’s near-term earnings prospects.
Technical Outlook
From a technical standpoint, the stock exhibits a bearish trend. Price movements over various time frames reflect investor pessimism. The stock has declined by 2.74% in the last trading day and has posted losses of 1.24% over the past month and 18.29% over three months. More notably, the stock has delivered a negative return of 41.70% over the last year, underperforming the BSE500 index consistently over one year, three months, and three years. This sustained downward momentum reinforces the cautionary rating.
Performance Summary and Market Position
Currently, Super Tannery Ltd is classified as a microcap within the diversified consumer products sector. Its market capitalisation remains modest, limiting liquidity and potentially increasing volatility. The company’s recent performance metrics, including a year-to-date decline of 7.39%, reflect ongoing challenges in regaining investor confidence. The combination of weak fundamentals, negative financial trends, and bearish technical signals underpin the Strong Sell rating, advising investors to approach the stock with prudence.
Implications for Investors
For investors, the Strong Sell rating suggests that Super Tannery Ltd is not currently a favourable investment opportunity. The rating implies that the stock is expected to continue underperforming due to structural weaknesses in its business and financial health. While the valuation appears attractive, it is outweighed by the risks associated with poor profitability, high leverage, and negative price momentum. Investors should carefully consider these factors and may prefer to avoid or reduce exposure to this stock until there are clear signs of operational and financial improvement.
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Contextualising the Stock’s Recent Returns
The latest data shows that Super Tannery Ltd has struggled to generate positive returns for shareholders. Over the past year, the stock has declined by 41.70%, a stark contrast to broader market indices such as the BSE500, which have delivered positive returns over the same period. The six-month return of -30.16% and three-month return of -18.29% further illustrate the persistent downward pressure on the stock price. Even short-term performance remains weak, with a 1-month loss of 1.24% and a 1-day decline of 2.74% as of 19 January 2026.
Long-Term Growth and Debt Considerations
While the company has achieved some growth in net sales at an annual rate of 11.11% over five years, this has not translated into sustainable profitability or strong returns on capital. The operating profit growth of 14.65% over the same period is modest and insufficient to offset the risks posed by the company’s high leverage. The Debt to EBITDA ratio of 3.39 times indicates a significant debt burden, which may constrain financial flexibility and increase vulnerability to economic downturns or sector-specific headwinds.
Summary of Key Metrics as of 19 January 2026
To summarise, the key metrics shaping the Strong Sell rating include:
- Mojo Score of 17.0, reflecting a weak overall outlook
- Below average quality grade, highlighting operational and profitability challenges
- Very attractive valuation, signalling potential value but overshadowed by risks
- Negative financial trend, with declining quarterly profits and sales
- Bearish technical grade, supported by sustained negative returns and price momentum
These factors collectively inform the current recommendation and provide a comprehensive picture of the stock’s risk-reward profile.
Conclusion
Super Tannery Ltd’s Strong Sell rating by MarketsMOJO, last updated on 18 November 2025, remains firmly justified by the company’s current financial and market position as of 19 January 2026. Investors should interpret this rating as a signal to exercise caution and consider alternative opportunities with stronger fundamentals and more favourable technical trends. While the valuation may appear enticing, the underlying weaknesses in quality and financial health present significant challenges that are unlikely to be resolved in the near term.
For those monitoring the stock, it is advisable to keep a close watch on any improvements in profitability, debt management, and price momentum before reassessing the investment case.
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