Current Rating and Its Significance
The 'Hold' rating assigned to Suratwwala Business Group Ltd indicates a neutral stance for investors. It suggests that while the stock may not be an immediate buy, it is not a sell either, reflecting a balanced view of the company’s prospects. This rating 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 stock’s potential risk and reward profile.
Quality Assessment
As of 27 January 2026, Suratwwala Business Group Ltd holds an average quality grade. This reflects a moderate level of operational efficiency and business stability. The company demonstrates a strong ability to service its debt, with a low Debt to EBITDA ratio of 1.17 times, indicating prudent financial management and manageable leverage. However, the long-term growth outlook remains a concern, as net sales have declined at an annual rate of -10.37% over the past five years, and operating profit has contracted by -17.02% annually during the same period. This mixed quality profile suggests that while the company maintains operational soundness, growth challenges persist.
Valuation Considerations
Currently, Suratwwala Business Group Ltd is classified as very expensive in terms of valuation. The stock trades at an enterprise value to capital employed (EV/CE) ratio of 4.8, which is high relative to typical benchmarks. Despite this, the stock is priced at a discount compared to its peers’ average historical valuations, offering some relative value. The company’s return on capital employed (ROCE) stands at a robust 18.8%, signalling efficient use of capital. However, the price-to-earnings-growth (PEG) ratio of 1.3 suggests that the market has priced in moderate growth expectations. Investors should weigh the premium valuation against the company’s growth prospects and profitability metrics.
Financial Trend and Recent Performance
The latest data as of 27 January 2026 shows a mixed financial trend for Suratwwala Business Group Ltd. The company has reported outstanding results in the recent September 2025 quarter, with net sales for the latest six months rising by 62.88% to ₹41.93 crores and profit after tax (PAT) increasing to ₹13.49 crores. Additionally, quarterly PBDIT reached a high of ₹11.06 crores. These figures indicate a positive short-term momentum and improved profitability. However, the stock’s returns over the past year have been disappointing, with a decline of -70.73%, reflecting significant market volatility or investor concerns. Over the past six months, the stock has also fallen by -24.87%, and the one-month performance shows a decline of -10.78%. This divergence between improving fundamentals and weak stock price performance warrants cautious consideration.
Technical Analysis
From a technical perspective, the stock is currently mildly bearish. The recent price movements, including a 1-day decline of -1.87% and a modest 1-week gain of +0.39%, suggest some short-term volatility without a clear upward trend. The technical grade reflects this uncertainty, indicating that the stock may face resistance before establishing a sustained rally. Investors relying on technical signals should monitor price action closely for confirmation of trend direction.
Additional Market Insights
Despite the company’s microcap status and recent positive financial results, domestic mutual funds hold no stake in Suratwwala Business Group Ltd. This absence of institutional ownership could imply a lack of confidence or insufficient research coverage at current price levels. Institutional investors typically conduct thorough due diligence, so their limited involvement may be a cautionary signal for retail investors.
Summary for Investors
In summary, Suratwwala Business Group Ltd’s 'Hold' rating reflects a balanced view of its current fundamentals and market position. The company shows strong financial discipline and recent earnings improvement, but faces challenges in long-term growth and valuation concerns. The mildly bearish technical outlook and lack of institutional backing add layers of complexity to the investment decision. For investors, this rating suggests monitoring the stock closely for further developments, particularly improvements in growth trajectory and market sentiment, before considering a more decisive position.
Strong fundamentals, solid momentum, fair price – This Large Cap from the NBFC sector checks every box for our Top 1%. This should definitely be on your radar!
- - Complete fundamentals package
- - Technical momentum confirmed
- - Reasonable valuation entry
Looking Ahead
Investors should continue to track Suratwwala Business Group Ltd’s quarterly results and market developments closely. The recent positive earnings momentum is encouraging, but sustained improvement in sales growth and a more favourable valuation will be critical to shift the rating towards a more bullish stance. Additionally, any increase in institutional interest could provide further validation of the company’s prospects.
Conclusion
Suratwwala Business Group Ltd’s current 'Hold' rating by MarketsMOJO, last updated on 11 December 2025, reflects a nuanced view of the company’s strengths and challenges as of 27 January 2026. While the company demonstrates solid financial health and recent operational improvements, valuation concerns and subdued technical signals temper enthusiasm. This rating advises investors to maintain a cautious approach, balancing the potential for recovery against existing risks.
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