Understanding the Current Rating
The Strong Sell rating assigned to Supertex Industries 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 based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment and helps investors understand the risks and opportunities associated with the stock.
Quality Assessment
As of 26 December 2025, Supertex Industries Ltd’s quality grade remains below average. The company has demonstrated weak long-term fundamental strength, with a compound annual growth rate (CAGR) in net sales of -5.93% over the past five years. This negative growth trend highlights challenges in expanding its revenue base. Additionally, the company’s ability to service debt is limited, as evidenced by a high Debt to EBITDA ratio of 7.54 times, indicating significant leverage and potential financial strain.
Profitability metrics also reflect subdued performance. The average Return on Equity (ROE) stands at a modest 2.01%, signalling low returns generated on shareholders’ funds. Such figures suggest that the company has struggled to convert capital into meaningful profits, which is a critical consideration for investors seeking quality growth stocks.
Valuation Perspective
Despite the weak quality metrics, Supertex Industries Ltd’s valuation grade is currently attractive. This suggests that the stock is trading at a relatively low price compared to its earnings, book value, or other valuation benchmarks. For value-oriented investors, this could present an opportunity to acquire shares at a discount. However, it is important to weigh this against the company’s fundamental challenges and overall market conditions before making investment decisions.
Financial Trend Analysis
The financial trend for Supertex Industries Ltd is flat, reflecting stagnation in key performance indicators. The latest half-year results show a net sales figure of ₹28.84 crores, which has declined by 30.87% compared to previous periods. Profit after tax (PAT) for the nine months ended September 2025 was negative ₹0.50 crore, representing a steep decline of 51.81%. Furthermore, the company’s Return on Capital Employed (ROCE) for the half-year is at a low 4.19%, underscoring limited efficiency in generating returns from its capital base.
These figures indicate that the company is currently facing operational and profitability headwinds, which have contributed to its subdued financial trend and weigh heavily on its investment appeal.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Technical Outlook
The technical grade for Supertex Industries Ltd is bearish, reflecting negative momentum in the stock price and weak market sentiment. The stock has consistently underperformed the benchmark indices, including the BSE500, over the past three years. As of 26 December 2025, the stock has delivered a one-year return of -44.93%, with a year-to-date decline of -42.52%. Shorter-term performance also remains weak, with losses of 2.63% in one day, 9.74% over one week, and 10.64% in one month.
This persistent downward trend in price action suggests that investors remain cautious, and technical indicators do not currently support a reversal or recovery in the near term.
Stock Performance Summary
Supertex Industries Ltd is classified as a microcap company within the Garments & Apparels sector. Its market capitalisation remains modest, which can contribute to higher volatility and liquidity risks. The combination of weak fundamentals, flat financial trends, and bearish technical signals has culminated in the current Strong Sell rating by MarketsMOJO.
Investors should consider these factors carefully, recognising that while the valuation appears attractive, the underlying business challenges and market pressures present significant risks. The rating serves as a cautionary signal to avoid or reduce exposure to this stock until there is clear evidence of improvement in its financial health and market performance.
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What This Rating Means for Investors
The Strong Sell rating is a clear indication that Supertex Industries Ltd currently faces significant headwinds that are unlikely to be resolved in the short term. Investors should interpret this as a warning to exercise caution and consider alternative investment opportunities with stronger fundamentals and more favourable technical outlooks.
For those holding the stock, it may be prudent to reassess their portfolio allocation and evaluate the potential risks of continued exposure. New investors are advised to wait for signs of operational turnaround, improved profitability, and positive technical signals before considering entry.
MarketsMOJO’s rating system integrates multiple dimensions of analysis to provide a holistic view of a stock’s prospects. In this case, the combination of below-average quality, attractive valuation but flat financial trends, and bearish technicals culminates in a recommendation to avoid or divest from Supertex Industries Ltd at this time.
Conclusion
In summary, Supertex Industries Ltd’s current Strong Sell rating reflects ongoing challenges in growth, profitability, and market performance. While the valuation may appear tempting, the risks associated with the company’s financial health and technical weakness outweigh potential rewards. Investors should monitor the stock closely for any signs of improvement but maintain a cautious stance based on the comprehensive analysis as of 26 December 2025.
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