Current Rating and Its Significance
The current Sell rating assigned to Surya Roshni Ltd indicates a cautious stance for investors considering this stock. This rating suggests that, based on a comprehensive evaluation of multiple parameters, the stock is expected to underperform relative to the broader market or its sector peers in the near to medium term. Investors should carefully weigh the risks and consider alternative opportunities before committing capital.
Quality Assessment
As of 10 January 2026, Surya Roshni Ltd’s quality grade is assessed as average. The company’s long-term growth has been modest, with net sales growing at an annualised rate of 8.35% over the past five years. While this indicates steady expansion, it falls short of the robust growth rates typically favoured by investors seeking high-quality growth stocks. Additionally, the company’s return on capital employed (ROCE) for the half-year ended September 2025 stands at 17.67%, which is the lowest in recent periods, signalling some pressure on operational efficiency.
Valuation Considerations
Valuation remains a key factor underpinning the current rating. Surya Roshni Ltd is considered expensive relative to its fundamentals. The stock trades at a price-to-book (P/B) ratio of 2.4, which is a premium compared to its peers’ historical averages. Despite generating a one-year return of 6.75%, the company’s profit growth has been subdued, rising only 2.2% over the same period. This disparity is reflected in a high price/earnings-to-growth (PEG) ratio of 8.1, indicating that the stock’s price may be overextended relative to its earnings growth prospects.
Financial Trend Analysis
The financial trend for Surya Roshni Ltd is currently flat. The company reported a profit before tax excluding other income (PBT less OI) of ₹77.08 crores in the latest quarter, which represents a decline of 12.7% compared to the average of the previous four quarters. Return on equity (ROE) stands at 13.1%, which, while positive, does not signal strong profitability growth. These flat financial trends contribute to the cautious outlook reflected in the current rating.
Technical Outlook
From a technical perspective, the stock is graded as mildly bearish. Recent price movements show a mixed performance: a 1-day decline of 0.85%, a 1-week drop of 1.16%, and a 3-month decrease of 5.51%. However, the stock has posted a 1-month gain of 8.53% and a 1-year return of 6.75%. Despite these short-term fluctuations, the overall technical indicators suggest a cautious stance, with the stock lacking strong upward momentum.
Investor Sentiment and Market Position
Surya Roshni Ltd is classified as a small-cap company within the Iron & Steel Products sector. Notably, domestic mutual funds hold a relatively small stake of just 1.56%, which may reflect limited institutional conviction or concerns about valuation and business prospects. Given that domestic mutual funds typically conduct thorough research, their modest exposure could signal reservations about the stock’s near-term potential.
Summary for Investors
In summary, the Sell rating on Surya Roshni Ltd reflects a combination of average quality, expensive valuation, flat financial trends, and a mildly bearish technical outlook as of 10 January 2026. Investors should interpret this rating as a signal to exercise caution and consider the stock’s risk-reward profile carefully. While the company maintains a presence in a fundamental sector, the current metrics suggest limited upside potential relative to the risks involved.
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Understanding the Mojo Score and Grade
MarketsMOJO’s proprietary Mojo Score for Surya Roshni Ltd currently stands at 37.0, which corresponds to the Sell grade. This score is derived from a weighted analysis of quality, valuation, financial trends, and technical factors. The score’s decline from 55 (Hold) to 37 (Sell) on 17 Nov 2025 reflects a reassessment of the company’s outlook based on evolving fundamentals and market conditions.
Performance Metrics in Context
As of 10 January 2026, the stock’s returns present a mixed picture. While the 1-year return of 6.75% is positive, it is modest when compared to broader market indices and sector averages. The 6-month return of -17.06% and 3-month return of -5.51% highlight recent volatility and downward pressure. Year-to-date, the stock has declined slightly by 0.65%, underscoring the cautious sentiment prevailing among investors.
Sector and Market Positioning
Operating within the Iron & Steel Products sector, Surya Roshni Ltd faces competitive pressures and cyclical demand patterns. The company’s small-cap status means it may be more susceptible to market fluctuations and liquidity constraints compared to larger peers. Investors should consider these sector dynamics alongside the company’s financial and technical profile when making investment decisions.
Final Thoughts for Investors
Given the current Sell rating, investors are advised to approach Surya Roshni Ltd with caution. The combination of average quality, expensive valuation, flat financial trends, and a mildly bearish technical outlook suggests limited near-term upside. Those holding the stock should monitor developments closely, while prospective investors might explore alternative opportunities with stronger fundamentals and more attractive valuations.
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