Understanding the Current Rating
The Strong Sell rating assigned to Supreme Infrastructure India Ltd indicates a cautious stance for investors, suggesting that the stock currently presents significant risks relative to potential rewards. 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 appeal and risk profile.
Quality Assessment
As of 28 February 2026, the company’s quality grade remains below average. This is primarily due to weak long-term fundamental strength. The average Return on Capital Employed (ROCE) stands at 0%, signalling that the company is not generating adequate returns on its invested capital. Furthermore, net sales have declined at an annualised rate of -17.60% over the past five years, reflecting persistent challenges in revenue growth. The high debt burden, with an average Debt to Equity ratio of 4.17 times, further weighs on the company’s quality profile, increasing financial risk and limiting operational flexibility.
Valuation Considerations
The valuation grade for Supreme Infrastructure India Ltd is classified as risky. The stock is currently trading at levels that are unfavourable compared to its historical averages. Despite a 28.9% increase in profits over the past year, the stock price has declined by 20.23% during the same period, indicating a disconnect between earnings performance and market valuation. This disparity suggests that investors remain cautious, possibly due to concerns about sustainability of earnings growth or broader sector challenges.
Financial Trend Analysis
Financially, the company shows a positive trend, with profits rising by nearly 29% over the last year. However, this improvement is tempered by the overall weak fundamentals and high leverage. The positive financial grade reflects recent operational gains but does not fully offset the risks posed by declining sales and heavy debt. Investors should note that while profitability has improved, the company’s ability to sustain this trajectory remains uncertain given its structural challenges.
Technical Outlook
The technical grade for Supreme Infrastructure India Ltd is bearish. The stock has underperformed the broader market significantly, with a one-year return of -20.23% compared to the BSE500’s 13.63% gain over the same period. Shorter-term price movements also reflect weakness, with declines of 2.99% over the past month and 10.50% over three months. The bearish technical signals suggest downward momentum and limited near-term upside, reinforcing the cautious stance implied by the Strong Sell rating.
Additional Risk Factors
Another critical consideration for investors is the high level of promoter share pledging, with 63.87% of promoter shares currently pledged. This situation can exert additional downward pressure on the stock price, especially in volatile or falling markets, as pledged shares may be liquidated to meet margin calls. Such dynamics add to the stock’s risk profile and warrant close monitoring.
Performance Summary
As of 28 February 2026, Supreme Infrastructure India Ltd’s stock performance has been disappointing. The stock has declined by 20.23% over the past year, underperforming the broader market significantly. Year-to-date, the stock is down 5.60%, and over six months it has lost 25.10%. These figures highlight the challenges the company faces in regaining investor confidence and market momentum.
What This Means for Investors
The Strong Sell rating signals that investors should exercise caution with Supreme Infrastructure India Ltd. The combination of weak quality metrics, risky valuation, mixed financial trends, and bearish technical indicators suggests that the stock carries elevated risk. Investors seeking exposure to the construction sector may prefer to consider alternatives with stronger fundamentals and more favourable technical setups. For those holding the stock, it is advisable to closely monitor developments, particularly around debt management and operational performance, before considering additional investment.
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Sector and Market Context
Operating within the construction sector, Supreme Infrastructure India Ltd faces a competitive and capital-intensive environment. The sector has seen mixed performance recently, with some companies benefiting from infrastructure spending and government initiatives, while others struggle with project delays and cost overruns. Compared to the broader market, represented by the BSE500, which has delivered a 13.63% return over the past year, Supreme Infrastructure’s underperformance is notable and reflects company-specific challenges.
Summary of Key Metrics as of 28 February 2026
• Mojo Score: 17.0 (Strong Sell)
• Market Capitalisation: Microcap segment
• Quality Grade: Below Average
• Valuation Grade: Risky
• Financial Grade: Positive
• Technical Grade: Bearish
• Debt to Equity Ratio (Average): 4.17 times
• Return on Capital Employed (Average): 0%
• Net Sales Growth (5-year CAGR): -17.60%
• Profit Growth (1 year): +28.9%
• Stock Returns (1 year): -20.23%
• Promoter Shares Pledged: 63.87%
Investor Takeaway
Investors should interpret the Strong Sell rating as a signal to approach Supreme Infrastructure India Ltd with caution. While recent profit growth offers some positive indication, the overall financial health, valuation risks, and technical weakness suggest that the stock is not currently a favourable investment. Monitoring the company’s efforts to reduce debt, improve sales growth, and stabilise its share price will be crucial for any future reassessment of its investment potential.
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