Understanding the Current Rating
The Strong Sell rating assigned to Supreme Infrastructure India Ltd indicates a cautious stance for investors, signalling that the stock is expected to underperform relative to the broader market. 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 of the company’s investment potential as of today.
Quality Assessment
As of 03 April 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%, reflecting an inability to generate adequate returns on invested capital. Additionally, the company has experienced a negative compound annual growth rate in net sales of -17.60% over the past five years, signalling declining business momentum. The high debt burden further weighs on quality, with an average Debt to Equity ratio of 4.17 times, indicating significant leverage and financial risk.
Valuation Considerations
Currently, Supreme Infrastructure India Ltd is classified as risky from a valuation perspective. The company reported a negative EBITDA of ₹-11.09 crores, which raises concerns about operational profitability. Despite this, profits have risen by 28.9% over the past year, suggesting some improvement in the bottom line. Nevertheless, the stock trades at valuations that are considered risky compared to its historical averages, which may deter value-conscious investors. The high level of promoter share pledging, at 63.87%, adds to the valuation risk by potentially increasing selling pressure in volatile markets.
Financial Trend Analysis
The financial grade for Supreme Infrastructure India Ltd is positive, reflecting some encouraging signs in recent performance. While the company’s stock has delivered a negative return of -41.09% over the last year, it has outpaced the market’s decline, with the BSE500 index falling by only -1.85% in the same period. This divergence highlights the stock’s underperformance relative to the broader market. The positive financial trend is supported by rising profits despite operational challenges, but the overall financial health remains fragile due to high leverage and negative EBITDA.
Technical Outlook
The technical grade is bearish, indicating downward momentum in the stock price. Recent price movements show a 1-day gain of 4.47%, but this short-term uptick contrasts with longer-term declines: -23.43% over one month, -28.28% over three months, and -40.51% over six months. The persistent negative trend suggests that investor sentiment remains weak, and the stock faces resistance in reversing its downward trajectory. The bearish technicals reinforce the cautionary stance implied by the Strong Sell rating.
Implications for Investors
For investors, the Strong Sell rating on Supreme Infrastructure India Ltd serves as a warning to approach the stock with caution. The combination of weak quality metrics, risky valuation, mixed financial trends, and bearish technical signals suggests that the stock may continue to face headwinds. Investors should carefully consider these factors in the context of their portfolio risk tolerance and investment horizon. The rating implies that the stock is not currently favourable for accumulation or long-term holding, especially given the company’s high debt levels and operational challenges.
Sector and Market Context
Operating within the construction sector, Supreme Infrastructure India Ltd is classified as a microcap company. The sector itself can be cyclical and sensitive to economic conditions, which may exacerbate the company’s challenges. The stock’s significant underperformance relative to the BSE500 index over the past year underscores the need for investors to weigh sector-specific risks alongside company fundamentals.
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Summary of Key Metrics as of 03 April 2026
The latest data shows the following key performance indicators for Supreme Infrastructure India Ltd:
- Mojo Score: 17.0, corresponding to a Strong Sell grade
- Stock returns: 1-day +4.47%, 1-week +0.33%, 1-month -23.43%, 3-month -28.28%, 6-month -40.51%, Year-to-date -28.41%, 1-year -41.09%
- Average Return on Capital Employed (ROCE): 0%
- Net Sales growth (5-year CAGR): -17.60%
- Debt to Equity ratio (average): 4.17 times
- Negative EBITDA: ₹-11.09 crores
- Promoter share pledged: 63.87%
These figures collectively illustrate the challenges faced by the company, including declining sales, high leverage, and operational losses, which underpin the current Strong Sell rating.
Investor Takeaway
Investors should interpret the Strong Sell rating as a signal to exercise caution and conduct thorough due diligence before considering any exposure to Supreme Infrastructure India Ltd. The company’s financial and technical indicators suggest that it is currently positioned as a high-risk investment. Monitoring future developments, including improvements in profitability, debt reduction, and market sentiment, will be essential for reassessing the stock’s outlook.
In conclusion, while the rating was last updated on 08 Jan 2025, the comprehensive analysis based on data as of 03 April 2026 confirms that Supreme Infrastructure India Ltd remains a stock to approach with prudence given its current fundamentals and market performance.
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