Surya Roshni Ltd is Rated Sell

Current Rating and Its Significance

MarketsMOJO’s 'Sell' rating for Surya Roshni Ltd indicates a cautious stance towards the stock, suggesting that investors may want to consider reducing exposure or avoiding new purchases at present. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment potential in the current market environment.

Quality Assessment

As of 24 February 2026, Surya Roshni Ltd’s quality grade is assessed as average. The company has demonstrated modest long-term growth, with net sales increasing at an annualised rate of 7.76% over the past five years. While this growth rate is positive, it is not particularly robust when compared to industry peers or broader market benchmarks. Additionally, the company’s return on capital employed (ROCE) for the half-year ended December 2025 stands at a relatively low 17.67%, indicating limited efficiency in generating profits from its capital base. The return on equity (ROE) is recorded at 13.1%, which, while positive, does not reflect strong profitability relative to the sector.

Valuation Considerations

Valuation remains a significant concern for Surya Roshni Ltd. The stock is currently graded as expensive, trading at a price-to-book value of 2, which is a premium compared to its peers’ historical averages. This elevated valuation suggests that the market price may not adequately reflect the company’s underlying financial performance or growth prospects. Despite this premium, the stock has delivered a negative return of -3.44% over the past year, while profits have declined marginally by -0.9%. Such a combination of high valuation and subdued earnings growth raises questions about the stock’s attractiveness at current levels.

Financial Trend Analysis

The financial trend for Surya Roshni Ltd is characterised as flat. The company’s recent results for the December 2025 half-year period show little improvement, with earnings remaining largely stagnant. This lack of momentum is reflected in the stock’s price performance, which has declined by 2.90% over the past year and by 24.32% over the last six months. Furthermore, the stock has underperformed the BSE500 index over multiple time frames, including the last three years, one year, and three months, signalling challenges in maintaining competitive returns for investors.

Technical Outlook

From a technical perspective, Surya Roshni Ltd is currently graded as bearish. The stock’s price trend has been negative in the near term, with a 4.94% decline over the past month and a 13.65% drop over the last three months. The one-day change as of 24 February 2026 was a marginal increase of 0.04%, indicating limited short-term buying interest. This bearish technical stance suggests that the stock may face continued downward pressure unless there is a significant shift in market sentiment or company fundamentals.

Additional Market Insights

Despite being a small-cap company in the Iron & Steel Products sector, Surya Roshni Ltd has relatively low institutional interest. Domestic mutual funds hold only 1.61% of the company’s shares, which may reflect a cautious approach by professional investors who typically conduct thorough on-the-ground research. This limited institutional participation could be interpreted as a lack of confidence in the company’s near-term prospects or valuation at current levels.

Summary for Investors

In summary, the 'Sell' rating for Surya Roshni Ltd reflects a combination of average quality metrics, expensive valuation, flat financial trends, and bearish technical indicators as of 24 February 2026. Investors should consider these factors carefully when evaluating the stock’s potential role in their portfolios. The current rating suggests that the stock may not offer favourable risk-reward characteristics in the near term, and a cautious approach is advisable.

Performance Recap

As of 24 February 2026, Surya Roshni Ltd’s stock returns have been underwhelming across multiple time horizons. The stock has declined by 18.55% year-to-date and by 24.32% over the past six months. Over the last three months, the stock has fallen 13.65%, while the one-month return stands at -4.94%. These figures highlight the stock’s recent struggles to generate positive momentum in a challenging market environment.

Industry and Market Context

Operating within the Iron & Steel Products sector, Surya Roshni Ltd faces competitive pressures and cyclical demand patterns that influence its financial performance. The company’s modest sales growth and flat earnings trend suggest that it has yet to capitalise fully on sector opportunities. Investors should weigh these sector dynamics alongside the company’s valuation and technical outlook when considering investment decisions.

Investor Takeaway

For investors, the current 'Sell' rating serves as a signal to exercise caution. The combination of average quality, expensive valuation, flat financial trends, and bearish technical signals implies that the stock may face headwinds in the near term. Those holding the stock may want to reassess their positions in light of these factors, while prospective investors might consider waiting for clearer signs of improvement before committing capital.

Conclusion

Surya Roshni Ltd’s current rating of 'Sell' by MarketsMOJO, last updated on 17 Nov 2025, is supported by a thorough analysis of the company’s present fundamentals and market performance as of 24 February 2026. This rating reflects a prudent investment stance given the company’s valuation premium, subdued growth, and technical weakness. Investors seeking exposure to the Iron & Steel Products sector may find more compelling opportunities elsewhere until Surya Roshni Ltd demonstrates a stronger turnaround in its financial and market metrics.

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