Current Rating and Its Significance
The 'Sell' rating assigned to Supreme Petrochem Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market or its sector peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Understanding these factors helps investors gauge the risks and potential rewards associated with holding or divesting this stock at present.
Quality Assessment
As of 31 January 2026, Supreme Petrochem Ltd holds a 'Good' quality grade. This reflects a stable operational foundation and reasonable business fundamentals. However, the company’s long-term growth has been lacklustre, with operating profit declining at an annualised rate of -1.66% over the past five years. This sluggish growth trend raises concerns about the company’s ability to expand its earnings base sustainably.
Valuation Perspective
The stock currently carries an 'Attractive' valuation grade, signalling that it may be trading at a discount relative to its intrinsic worth or sector averages. This could present a value opportunity for investors who are willing to look beyond short-term challenges. Nonetheless, valuation alone does not offset the broader financial and technical weaknesses that the company is facing.
Financial Trend Analysis
The financial trend for Supreme Petrochem Ltd is categorised as 'Very Negative'. The latest data shows a decline in net sales by -6.85%, and the company has reported negative results for three consecutive quarters ending December 2025. Profit after tax (PAT) for the latest quarter stands at ₹35.50 crores, down by -53.8% compared to the previous four-quarter average. Additionally, the return on capital employed (ROCE) for the half-year is at a low 18.01%, and cash and cash equivalents have dropped to ₹342.14 crores, the lowest level recorded in recent periods. These indicators highlight significant financial stress and deteriorating profitability.
Technical Outlook
The technical grade is 'Bearish', reflecting negative momentum in the stock price and weak market sentiment. Recent price movements reinforce this view: while the stock gained 6.39% in a single day and 11.67% over the past week, it has declined sharply over longer periods, with a 1-month loss of -12.55%, 3-month loss of -25.82%, and 6-month loss of -29.65%. Year-to-date, the stock is down -13.11%, and over the past year, it has underperformed the broader market, delivering a negative return of -7.38% compared to the BSE500’s positive 7.95% return.
Comparative Market Performance
Supreme Petrochem Ltd’s underperformance relative to the BSE500 index over the last year is a key consideration for investors. While the broader market has shown resilience and growth, the stock’s negative returns underscore challenges specific to the company and its sector. This divergence emphasises the importance of cautious positioning and thorough analysis before committing capital.
Implications for Investors
For investors, the 'Sell' rating suggests a prudent approach, particularly given the combination of weak financial trends and bearish technical signals. The attractive valuation may tempt some to consider the stock as a turnaround candidate, but the persistent negative earnings and cash flow pressures warrant careful scrutiny. Investors should weigh the risks of further declines against any potential recovery catalysts, keeping in mind the company’s recent performance and sector dynamics.
Under the radar no more! This Large Cap from Cement is emerging from turnaround with solid fundamentals intact. Discover it while it's still relatively hidden!
- - Hidden turnaround gem
- - Solid fundamentals confirmed
- - Large Cap opportunity
Summary of Key Metrics as of 31 January 2026
The Mojo Score for Supreme Petrochem Ltd currently stands at 33.0, reflecting the overall 'Sell' grade. This is a significant decline from the previous score of 61, which corresponded to a 'Hold' rating before 03 Nov 2025. The downgrade reflects the deterioration in financial health and technical outlook despite the company’s decent quality and attractive valuation.
Investors should note that the company operates in the petrochemicals sector, which can be cyclical and sensitive to commodity price fluctuations. The small-cap status of Supreme Petrochem Ltd adds an additional layer of volatility and risk compared to larger, more diversified peers.
Looking Ahead
While the current rating advises caution, investors monitoring Supreme Petrochem Ltd should watch for signs of financial stabilisation or improvement in operating performance. Key indicators to track include a reversal in sales decline, improvement in profitability metrics such as PAT and ROCE, and a strengthening cash position. Additionally, a shift in technical momentum could signal a change in market sentiment.
Until such developments materialise, the 'Sell' rating serves as a prudent guide for investors to reassess their exposure and consider alternative opportunities with stronger fundamentals and more favourable technical profiles.
Conclusion
Supreme Petrochem Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 03 Nov 2025, is grounded in a thorough analysis of its quality, valuation, financial trend, and technical outlook as of 31 January 2026. Despite an attractive valuation and decent quality grade, the company’s very negative financial trend and bearish technical signals underpin the cautious recommendation. Investors should carefully evaluate these factors in the context of their portfolio strategy and risk tolerance.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
