Surana Telecom and Power Ltd is Rated Strong Sell

Current Rating Overview

MarketsMOJO’s Strong Sell rating for Surana Telecom and Power Ltd indicates a cautious stance for investors, signalling significant concerns across multiple evaluation parameters. The rating reflects a combination of weak fundamentals, risky valuation, flat financial trends, and mildly bearish technical indicators. This comprehensive assessment aims to guide investors in understanding the risks associated with the stock in the current market environment.

Quality Assessment

As of 12 January 2026, Surana Telecom and Power Ltd’s quality grade is categorised as below average. The company has exhibited a troubling long-term fundamental weakness, with a compounded annual growth rate (CAGR) of operating profits at a negative -207.28% over the past five years. This steep decline highlights persistent operational challenges and an inability to generate sustainable earnings growth.

Moreover, the company’s ability to service its debt remains weak, as evidenced by an average EBIT to interest ratio of -1.12. This negative ratio suggests that operating earnings are insufficient to cover interest expenses, raising concerns about financial stability. The average return on equity (ROE) stands at a modest 7.08%, indicating low profitability relative to shareholders’ funds and limited value creation for investors.

Valuation Considerations

The valuation grade for Surana Telecom and Power Ltd is currently classified as risky. Despite the stock’s negative returns over the past year, the company’s profits have risen by 127.7%, resulting in a price-to-earnings-to-growth (PEG) ratio of 0.1. While a low PEG ratio can sometimes indicate undervaluation, in this context it reflects a disconnect between market pricing and underlying financial health, compounded by negative operating profits.

Investors should note that the stock’s market capitalisation remains in the microcap segment, which typically entails higher volatility and liquidity risks. The stock’s recent price performance has been disappointing, with a 13.62% decline over the last 12 months, underperforming the broader BSE500 index, which has delivered a positive 6.56% return in the same period.

Financial Trend Analysis

The financial trend for Surana Telecom and Power Ltd is flat, signalling stagnation rather than growth. The latest quarterly results for September 2025 reveal a 66.1% fall in profit after tax (PAT), which stood at ₹0.76 crore. Operating cash flow for the year is at a low ₹3.50 crore, indicating limited cash generation capacity. Additionally, the debtors turnover ratio for the half-year is at a low 2.64 times, suggesting inefficiencies in receivables management and potential liquidity constraints.

These flat or deteriorating financial metrics underscore the challenges the company faces in improving operational efficiency and profitability, which weigh heavily on the overall rating.

Technical Outlook

From a technical perspective, the stock is mildly bearish. Recent price movements show a 1-day decline of 1.51%, a 1-week drop of 2.29%, and a 3-month fall of 11.19%. Although there was a modest 3.70% gain over six months, the year-to-date performance remains negative at -2.78%. These trends suggest a lack of strong upward momentum, with the stock struggling to gain investor confidence amid broader market pressures.

Implications for Investors

The Strong Sell rating implies that investors should exercise caution with Surana Telecom and Power Ltd. The combination of weak fundamentals, risky valuation, flat financial trends, and bearish technical signals suggests that the stock carries elevated risk and may not be suitable for risk-averse portfolios. Investors seeking capital preservation or steady returns might consider alternative opportunities with stronger financial health and more favourable market dynamics.

However, for those with a higher risk tolerance, the current depressed valuation and recent profit growth could present a speculative opportunity, albeit with significant uncertainty. It is essential to monitor the company’s operational improvements and market conditions closely before making investment decisions.

Summary of Key Metrics as of 12 January 2026

Surana Telecom and Power Ltd’s Mojo Score currently stands at 17.0, reflecting the Strong Sell grade. The stock’s recent price performance includes a 1-day decline of 1.51%, a 1-week drop of 2.29%, and a 1-month fall of 1.85%. Over three months, the stock has declined by 11.19%, while the six-month return is a modest 3.70%. Year-to-date, the stock is down 2.78%, and over the past year, it has delivered a negative return of 13.62%, underperforming the broader market significantly.

The company’s financial dashboard highlights several concerns: a negative CAGR in operating profits over five years, poor debt servicing ability, low return on equity, and flat to declining profitability and cash flow metrics. These factors collectively justify the current Strong Sell rating and suggest that investors should approach the stock with caution.

Looking Ahead

Investors should continue to monitor Surana Telecom and Power Ltd’s operational performance, cash flow generation, and debt management closely. Any meaningful improvement in these areas could alter the company’s outlook and potentially lead to a reassessment of its rating. Until then, the Strong Sell recommendation remains a prudent guide for managing risk in portfolios exposed to this stock.

Conclusion

Surana Telecom and Power Ltd’s Strong Sell rating by MarketsMOJO, last updated on 29 December 2025, reflects a comprehensive evaluation of the company’s current financial and market position as of 12 January 2026. The rating is driven by below-average quality, risky valuation, flat financial trends, and mildly bearish technical indicators. For investors, this rating signals caution and highlights the need for careful consideration before investing in this microcap power sector stock.

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