Understanding the Current Rating
The Strong Sell rating assigned to Super Tannery Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market. 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 as of today.
Quality Assessment
As of 05 June 2026, Super Tannery Ltd’s quality grade is below average. This reflects concerns about the company’s fundamental strength and operational efficiency. The average Return on Capital Employed (ROCE) stands at a modest 6.80%, signalling limited profitability relative to the capital invested. Over the past five years, net sales have grown at an annual rate of 5.26%, while operating profit has increased by 5.67% annually. These growth rates are subdued, indicating a lack of robust expansion or margin improvement. Additionally, the company’s ability to service its debt is weak, with a high Debt to EBITDA ratio of 4.39 times, suggesting elevated financial risk and potential strain on cash flows.
Valuation Perspective
Despite the challenges in quality, the valuation grade for Super Tannery Ltd is currently attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings and asset base. Investors looking for potential bargains might find this aspect appealing, although valuation alone does not offset the risks posed by other factors. The microcap status of the company also implies limited liquidity and higher volatility, which investors should consider carefully.
Financial Trend Analysis
The financial trend for Super Tannery Ltd is flat as of today. The latest quarterly results show net sales at ₹57.24 crores, the lowest recorded in recent periods. The company’s debt-equity ratio has risen to 0.84 times in the half-yearly report, marking the highest level to date. Interest expenses have also increased, reaching ₹1.88 crores in the latest quarter. These indicators point to a stagnation in growth and rising financial burdens, which weigh on the company’s overall health and future prospects.
Technical Outlook
From a technical standpoint, the stock is mildly bearish. Price movements over various time frames reveal mixed performance: a 1-day gain of 0.41%, a flat 1-week return, and a 3-month rise of 17.20%. However, the 1-year return is negative at -19.56%, reflecting sustained underperformance. The stock has consistently lagged behind the BSE500 benchmark over the past three years, with annual returns underperforming the index each year. This trend suggests limited investor confidence and a lack of momentum in the share price.
Additional Risk Factors
One notable concern is the high level of promoter share pledging, which currently stands at 51.12%. This is significant because pledged shares can exert downward pressure on the stock price, especially in volatile or falling markets. The proportion of pledged holdings has increased by the same percentage over the last quarter, signalling potential liquidity risks and governance issues that investors should monitor closely.
Stock Performance Summary
As of 05 June 2026, Super Tannery Ltd’s stock returns show a mixed picture. While short-term gains over one month (+3.95%) and three months (+17.20%) indicate some recovery, the longer-term performance remains weak. The six-month return is +10.01%, and year-to-date gains are +6.67%, but the one-year return is negative at -19.56%. This pattern highlights volatility and inconsistent investor sentiment, reinforcing the cautious stance implied by the Strong Sell rating.
Implications for Investors
The Strong Sell rating from MarketsMOJO serves as a warning for investors to approach Super Tannery Ltd with caution. The combination of below-average quality, flat financial trends, mild bearish technical signals, and high promoter share pledging suggests elevated risks. While the attractive valuation may tempt value-oriented investors, the underlying fundamentals and market dynamics indicate that the stock may continue to face headwinds in the near term.
Investors should consider these factors carefully and weigh them against their risk tolerance and investment horizon. Diversification and thorough due diligence remain essential when dealing with microcap stocks exhibiting such mixed signals.
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Company Profile and Market Context
Super Tannery Ltd operates within the diversified consumer products sector and is classified as a microcap company. Its market capitalisation reflects its relatively small size in the broader market landscape. This status often entails higher volatility and liquidity constraints, factors that investors should consider alongside fundamental and technical analyses.
Mojo Score and Grade
The company’s current Mojo Score stands at 28.0, which corresponds to a Strong Sell grade. This score has declined by 3 points from the previous 31, reflecting a deterioration in the overall assessment. The previous rating was Sell, updated on 01 June 2026, underscoring a more cautious outlook by MarketsMOJO’s analysts.
Summary of Key Metrics as of 05 June 2026
To summarise the key financial and performance metrics:
- Return on Capital Employed (ROCE): 6.80% (below average)
- Net Sales Growth (5-year CAGR): 5.26%
- Operating Profit Growth (5-year CAGR): 5.67%
- Debt to EBITDA Ratio: 4.39 times (high leverage)
- Debt-Equity Ratio (Half Year): 0.84 times (highest recorded)
- Interest Expense (Quarterly): ₹1.88 crores (highest recorded)
- Promoter Share Pledging: 51.12% (increased over last quarter)
- Stock Returns: 1Y -19.56%, 3M +17.20%, YTD +6.67%
These figures collectively illustrate a company facing operational and financial challenges, with limited growth and elevated risk factors.
Conclusion
Super Tannery Ltd’s Strong Sell rating reflects a comprehensive evaluation of its current financial health, market performance, and risk profile. While the stock’s valuation appears attractive, the underlying quality concerns, flat financial trends, and technical weakness caution investors against expecting near-term recovery. The high level of promoter share pledging adds an additional layer of risk, particularly in volatile market conditions.
Investors should remain vigilant and consider these factors carefully when making portfolio decisions involving Super Tannery Ltd. The rating serves as a guide to the stock’s current outlook, emphasising prudence and thorough analysis.
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