Surana Telecom and Power Ltd is Rated Sell

Current Rating Overview

MarketsMOJO currently assigns Surana Telecom and Power Ltd a 'Sell' rating, reflecting a cautious stance on the stock. This rating was revised on 23 December 2025, moving from a 'Strong Sell' to a 'Sell' grade, accompanied by an improvement in the Mojo Score from 17 to 33. Despite this improvement, the rating indicates that the stock remains a less favourable investment option relative to the broader market and sector peers.

Here’s How the Stock Looks Today

As of 25 December 2025, Surana Telecom and Power Ltd is classified as a microcap company operating within the power sector. The stock has shown mixed performance over recent periods, with a one-day gain of 4.8%, a one-week increase of 7.67%, and a one-month rise of 13.01%. However, longer-term returns remain negative, with a 3-month decline of 4.38%, a 6-month gain of 10.94%, a year-to-date loss of 9.44%, and a one-year return of -10.44%. This underperformance contrasts with the BSE500 index, which has delivered a positive return of 6.20% over the same one-year period.

Quality Assessment

The quality grade for Surana Telecom and Power Ltd is below average, signalling concerns about the company’s fundamental strength. The latest data shows a weak long-term fundamental profile, with a compounded annual growth rate (CAGR) of operating profits at a deeply negative -207.28% over the past five years. This indicates significant operational challenges and declining profitability. Additionally, the company’s ability to service debt is poor, with an average EBIT to interest ratio of -1.12, suggesting that earnings before interest and tax are insufficient to cover interest expenses. Return on equity (ROE) stands at a modest 7.08%, reflecting low profitability generated from shareholders’ funds.

Valuation Considerations

Valuation metrics classify the stock as risky. Despite the negative operating profits, the company’s profits have risen by 127.7% over the past year, resulting in a price-to-earnings-to-growth (PEG) ratio of 0.1. This low PEG ratio might typically indicate undervaluation; however, the negative operating profit and weak fundamentals temper this interpretation. The stock’s valuation remains elevated relative to its historical averages, contributing to the cautious rating.

Financial Trend Analysis

Financial trends for Surana Telecom and Power Ltd are largely flat. The company reported a quarterly profit after tax (PAT) of ₹0.76 crore in September 2025, which represents a sharp decline of 66.1% compared to previous quarters. Operating cash flow for the year is at a low ₹3.50 crore, and the debtors turnover ratio for the half-year stands at 2.64 times, indicating slower collection efficiency. These factors highlight a lack of financial momentum and ongoing operational challenges.

Technical Outlook

The technical grade for the stock is mildly bullish, reflecting some positive momentum in price action despite the fundamental weaknesses. The recent short-term gains, including a 4.8% rise in a single day and a 13.01% increase over the past month, suggest that technical indicators may be signalling a potential recovery or short-term buying interest. However, these signals are tempered by the broader negative trend in fundamentals and valuation risks.

Implications for Investors

For investors, the 'Sell' rating on Surana Telecom and Power Ltd implies a recommendation to avoid initiating new positions or to consider reducing existing holdings. The rating reflects a combination of weak fundamental quality, risky valuation, flat financial trends, and only mild technical support. While the stock has shown some short-term price appreciation, the underlying business challenges and poor long-term profitability metrics suggest caution.

Investors should weigh the risks associated with the company’s operational performance and financial health against any potential technical opportunities. The stock’s underperformance relative to the broader market over the past year further emphasises the need for prudence.

Summary

In summary, Surana Telecom and Power Ltd’s current 'Sell' rating by MarketsMOJO reflects a comprehensive evaluation of its quality, valuation, financial trends, and technical outlook as of 25 December 2025. Despite some recent price gains and an improved Mojo Score, the company’s weak fundamentals, risky valuation, and flat financial performance underpin the cautious recommendation. Investors should carefully consider these factors when making decisions regarding this stock.

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