Current Rating and Its Significance
MarketsMOJO currently assigns Team India Guaranty Ltd a 'Sell' rating, indicating a cautious stance for investors. This rating suggests that the stock may underperform relative to the broader market or its sector peers in the near to medium term. Investors should consider this recommendation as a signal to evaluate the risks carefully before committing capital, especially given the company's microcap status within the Non Banking Financial Company (NBFC) sector.
Rating Update Context
The rating was revised from 'Strong Sell' to 'Sell' on 29 October 2025, reflecting a modest improvement in the company’s outlook. The Mojo Score increased by 15 points, moving from 22 to 37, signalling some positive developments. Nevertheless, the 'Sell' grade remains below average, underscoring ongoing challenges that investors must weigh.
Here’s How the Stock Looks Today
As of 07 February 2026, Team India Guaranty Ltd’s financial and market data reveal a mixed picture. The stock has experienced notable volatility, with a one-day decline of 5.23%, a one-month drop of 13.42%, and a six-month decrease of 14.78%. Despite these short-term setbacks, the stock has delivered a robust 42.83% return over the past year, reflecting some underlying resilience amid sector headwinds.
Quality Assessment
The company’s quality grade is below average, primarily due to weak long-term fundamental strength. The average Return on Equity (ROE) stands at 5.90%, which is modest for an NBFC and indicates limited profitability relative to shareholder equity. Net sales have grown at a sluggish annual rate of 2.72%, while operating profit has increased by 8.62% annually. These figures suggest that the company’s growth trajectory remains subdued, raising concerns about its ability to generate sustainable earnings growth.
Valuation Perspective
Valuation is a critical factor in the current rating. Team India Guaranty Ltd is considered very expensive, trading at a Price to Book (P/B) ratio of 4.7, which is significantly higher than the average valuations of its peers. This premium valuation is not fully supported by the company’s fundamentals, as the ROE of 5.2% does not justify such a high multiple. The PEG ratio of 3 further indicates that the stock’s price growth has outpaced earnings growth, suggesting that investors are paying a premium for future growth expectations that may be challenging to meet.
Financial Trend Analysis
The financial grade is flat, reflecting a lack of significant improvement or deterioration in recent quarters. The company reported flat results in September 2025, which aligns with the broader trend of muted growth. While profits have risen by 30.4% over the past year, this increase has not translated into a stronger financial trend, as other key metrics remain stagnant. This flat trend signals caution for investors seeking companies with accelerating financial momentum.
Technical Outlook
Technically, the stock is mildly bullish, indicating some positive momentum in price action despite recent volatility. The one-week gain of 1.92% contrasts with the one-day and one-month declines, suggesting short-term fluctuations within a cautiously optimistic technical framework. However, the mild bullishness is not strong enough to offset the fundamental and valuation concerns, reinforcing the 'Sell' rating.
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Implications for Investors
For investors, the 'Sell' rating on Team India Guaranty Ltd signals a need for prudence. The combination of below-average quality, very expensive valuation, flat financial trends, and only mild technical support suggests that the stock may face headwinds in delivering consistent returns. While the impressive one-year return of 42.83% is noteworthy, it appears to be driven more by market sentiment than by robust fundamental improvements.
Investors should carefully consider whether the current premium valuation is justified given the company’s modest profitability and slow growth. The elevated Price to Book ratio and PEG ratio highlight the risk of overvaluation, which could lead to price corrections if growth expectations are not met. Additionally, the flat financial trend and below-average quality metrics suggest limited upside potential in the near term.
Sector and Market Context
Operating within the NBFC sector, Team India Guaranty Ltd faces competitive pressures and regulatory challenges that can impact earnings stability. The microcap status of the company also implies higher volatility and liquidity risks compared to larger peers. Investors should weigh these sector-specific factors alongside the company’s individual metrics when making portfolio decisions.
Summary
In summary, Team India Guaranty Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 29 October 2025, reflects a cautious outlook based on comprehensive analysis of quality, valuation, financial trends, and technical factors as of 07 February 2026. The stock’s expensive valuation and flat financial performance temper the positive aspects of recent price gains and mild technical bullishness. Investors are advised to approach this stock with caution and consider alternative opportunities with stronger fundamentals and more attractive valuations.
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