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 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 stock’s attractiveness and risk profile.
Quality Assessment
As of 15 January 2026, 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 a sustained downturn in business activity. Additionally, the company has reported negative results for four consecutive quarters, with net sales for the latest six months at ₹21.82 crores, down by 40.79%. The operating environment remains challenging, and the company’s return on capital employed (ROCE) for the half-year stands at a negative -0.66%, underscoring inefficiencies in capital utilisation.
Valuation Considerations
The valuation grade for Supreme Infrastructure India Ltd is classified as risky. The stock currently trades at valuations that are unfavourable 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 -31.18% during the same period. This divergence suggests that market sentiment remains bearish, likely reflecting concerns over the company’s financial health and growth prospects. Investors should be wary of the elevated risk embedded in the stock’s price, especially given the company’s high debt levels and operational losses.
Financial Trend Analysis
The financial trend for Supreme Infrastructure India Ltd is negative. The company is burdened by a high debt-to-equity ratio averaging 4.17 times, indicating significant leverage that could constrain future growth and increase financial risk. The latest six-month profit after tax (PAT) figure stands at a substantial loss of ₹-560.05 crores, mirroring the ongoing operational difficulties. Furthermore, the proportion of promoter shares pledged has risen sharply by 47.57% over the last quarter, now constituting 63.87% of promoter holdings. This elevated pledge level can exert additional downward pressure on the stock price, especially in volatile market conditions.
Technical Outlook
The technical grade for the stock is bearish, reflecting a downtrend in price momentum and weak market sentiment. Recent price movements show consistent declines, with the stock falling -0.23% on the latest trading day and a 1-month loss of -5.79%. Over the past six months, the stock has declined by -29.23%, and year-to-date returns stand at -3.00%. This underperformance is stark when compared to the broader market, where the BSE500 index has generated positive returns of 8.97% over the last year. The technical indicators suggest limited near-term recovery potential, reinforcing the cautious stance advised by the current rating.
Stock Performance Summary
As of 15 January 2026, Supreme Infrastructure India Ltd has underperformed significantly relative to the market and its sector peers. The stock’s one-year return of -31.18% contrasts sharply with the positive market returns, highlighting the challenges faced by the company. The combination of weak fundamentals, risky valuation, negative financial trends, and bearish technical signals justifies the Strong Sell rating, signalling investors to exercise caution and consider the elevated risks before investing.
Fundamentals that don't lie! This Small Cap from Trading shows consistent growth and price strength over time. A reliable pick you can truly count on.
- - Strong fundamental track record
- - Consistent growth trajectory
- - Reliable price strength
What This Rating Means for Investors
The Strong Sell rating serves as a clear warning signal for investors. It suggests that the stock currently carries a high degree of risk, with limited prospects for near-term recovery or value appreciation. Investors should carefully evaluate their risk tolerance and investment horizon before considering exposure to Supreme Infrastructure India Ltd. The company’s ongoing operational losses, high leverage, and deteriorating financial metrics indicate that the stock may continue to face downward pressure.
For those holding the stock, this rating advises prudence and consideration of risk mitigation strategies. Potential investors might prefer to explore alternatives with stronger fundamentals and more favourable valuations. The rating also highlights the importance of monitoring key financial indicators and market developments closely, as any improvement in the company’s operational performance or capital structure could influence future assessments.
Sector and Market Context
Within the construction sector, Supreme Infrastructure India Ltd’s performance is notably weaker than many peers. The sector itself faces cyclical challenges, but companies with robust balance sheets and positive earnings trends have generally fared better. The stock’s microcap status and high promoter share pledging further amplify its risk profile, making it less attractive relative to larger, more stable construction firms.
Investors should also consider broader market conditions, including interest rate trends, infrastructure spending policies, and economic growth forecasts, which can impact the construction sector’s outlook. Given the current data as of 15 January 2026, Supreme Infrastructure India Ltd remains a high-risk proposition within this context.
Conclusion
In summary, Supreme Infrastructure India Ltd’s Strong Sell rating by MarketsMOJO, last updated on 08 Jan 2025, reflects a comprehensive assessment of the company’s weak quality, risky valuation, negative financial trends, and bearish technical outlook. The latest data as of 15 January 2026 confirms ongoing challenges, including significant losses, high leverage, and poor stock performance relative to the market. Investors are advised to approach this stock with caution and consider the elevated risks before making investment decisions.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
