Supreme Infrastructure India Ltd is Rated Strong Sell

Understanding the Current Rating

The Strong Sell rating assigned to Supreme Infrastructure India Ltd indicates a cautious stance for investors, signalling significant risks and challenges facing the company. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential and risk profile.

Quality Assessment

As of 24 December 2025, the company’s quality grade remains below average. Supreme Infrastructure India Ltd has demonstrated weak long-term fundamental strength, primarily due to persistent operating losses and declining sales. Over the past five years, net sales have contracted at an annual rate of -25.58%, reflecting significant challenges in sustaining growth within the construction sector. Additionally, the company’s return on capital employed (ROCE) for the half-year period stands at a negative -0.66%, underscoring inefficiencies in capital utilisation and profitability.

Valuation Concerns

The valuation grade for Supreme Infrastructure India Ltd is classified as risky. The stock currently trades at levels that suggest elevated risk compared to its historical averages. Despite a modest 2.8% increase in profits over the past year, the stock has delivered a negative return of -38.22% over the same period. This divergence between profit growth and share price performance highlights market scepticism regarding the company’s future prospects and valuation sustainability.

Financial Trend Analysis

The financial trend for Supreme Infrastructure India Ltd is negative. The company has reported losses for four consecutive quarters, with net sales for the latest six months declining by -40.79% to ₹21.82 crores. Correspondingly, the profit after tax (PAT) for the same period stands at a substantial loss of ₹-560.05 crores. The company’s debt position remains a critical concern, with an average debt-to-equity ratio of 4.17 times, indicating a highly leveraged balance sheet. Furthermore, promoter share pledging has increased significantly, with 63.87% of promoter shares pledged as of the latest data, up by 47.57% over the last quarter. This elevated pledge ratio adds downward pressure on the stock price, especially in volatile market conditions.

Technical Outlook

The technical grade for Supreme Infrastructure India Ltd is bearish. The stock has underperformed the broader market significantly over the past year. While the BSE500 index has generated a positive return of 6.20% in the last 12 months, Supreme Infrastructure’s stock price has declined by -38.22%. Short-term price movements also reflect this negative momentum, with the stock falling -0.10% on the latest trading day, -7.66% over the past week, and -17.76% over the last three months. These trends suggest continued selling pressure and weak investor sentiment.

Investor Implications

For investors, the Strong Sell rating signals a high-risk environment with limited near-term upside. The combination of weak fundamentals, risky valuation, deteriorating financial trends, and bearish technical indicators suggests that the stock may continue to face downward pressure. Investors should exercise caution and consider the company’s financial health, market position, and sector challenges before making investment decisions.

Summary of Key Metrics as of 24 December 2025

• Market Capitalisation: Microcap segment


• Debt to Equity Ratio (average): 4.17 times


• Net Sales (latest six months): ₹21.82 crores, down -40.79%


• Profit After Tax (latest six months): ₹-560.05 crores, down -40.79%


• Return on Capital Employed (HY): -0.66%


• Promoter Shares Pledged: 63.87%, increased by 47.57% last quarter


• Stock Returns: 1 Year -38.22%, Year-to-Date -35.66%

Conclusion

Supreme Infrastructure India Ltd’s current Strong Sell rating reflects a confluence of adverse factors that weigh heavily on its investment appeal. The company’s ongoing operating losses, high leverage, declining sales, and negative technical signals collectively suggest that the stock is facing significant headwinds. Investors should carefully evaluate these risks in the context of their portfolios and investment objectives. While the construction sector can offer opportunities, Supreme Infrastructure’s present financial and market position advises prudence and a cautious approach.

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