Thirani Projects Ltd Downgraded to Strong Sell Amid Mixed Technicals and Flat Financials

Technical Trends Shift to Mildly Bearish

The primary driver behind the rating upgrade is a recalibration of the technical grade. The technical trend for Thirani Projects has moved from a clearly bearish stance to a mildly bearish one. Weekly indicators such as the Moving Average Convergence Divergence (MACD) have turned mildly bullish, suggesting some short-term momentum improvement. However, monthly MACD remains mildly bearish, indicating persistent longer-term caution.

Other technical indicators present a mixed picture. The Relative Strength Index (RSI) on both weekly and monthly charts shows no clear signal, while Bollinger Bands suggest sideways movement weekly but mildly bearish conditions monthly. Daily moving averages continue to reflect bearishness, reinforcing the cautious stance. The Know Sure Thing (KST) indicator is mildly bullish weekly but mildly bearish monthly, and Dow Theory analysis shows no clear weekly trend but a mildly bullish monthly outlook.

Overall, these technical nuances imply that while short-term price action has improved, the longer-term technical outlook remains subdued, justifying the cautious upgrade to Strong Sell rather than a more optimistic rating.

Valuation Grade Improves to Attractive

Alongside technical changes, Thirani Projects’ valuation grade has improved from very attractive to attractive. The company currently trades at a price-to-earnings (PE) ratio of 18.06, which is moderate compared to peers such as Ashika Credit (PE 119.58) and Satin Creditcare (PE 7.76). Its price-to-book (P/B) value stands at a low 0.67, indicating the stock is trading below its book value and suggesting potential undervaluation.

Enterprise value to EBIT and EBITDA ratios both hover around 9.90, reflecting reasonable operational valuation multiples. The company’s return on capital employed (ROCE) is 4.48%, while return on equity (ROE) is 3.72%, both modest but slightly improved from previous periods. The PEG ratio remains at zero, indicating no growth premium priced in, which aligns with the company’s flat financial trend.

Compared to its NBFC peers, Thirani Projects offers a valuation discount, which could attract value-focused investors despite the company’s underlying challenges.

Financial Trend Remains Flat with Weak Growth Metrics

Despite some positive valuation signals, the company’s financial performance remains lacklustre. The latest quarter (Q4 FY25-26) reported flat results, with earnings per share (EPS) at a low Rs 0.03. Net sales have grown at a sluggish annual rate of 2.47%, signalling weak top-line momentum.

Long-term fundamental strength is poor, with an average ROE of just 1.69%, underscoring limited profitability and capital efficiency. Over the past year, profits have declined by 27%, even as the stock price generated a 13.51% return, highlighting a disconnect between market performance and underlying earnings quality.

Majority shareholders remain non-institutional, which may limit the stock’s liquidity and institutional interest. The company’s micro-cap status further adds to the risk profile, with a market capitalisation that places it in a less stable category compared to larger NBFCs.

Market Performance Outpaces Benchmarks Despite Challenges

Thirani Projects has delivered mixed returns relative to the broader market. Over the past week, the stock surged 8.81%, outperforming the Sensex’s 3.91% gain. Year-to-date, both the stock and Sensex have declined by 9.87%, reflecting broader market headwinds. However, over one year, the stock has generated a 13.51% return, significantly outperforming the Sensex’s negative 6.10% return.

Longer-term returns are even more impressive, with a three-year return of 77.22% and a five-year return of 133.33%, both well above the Sensex’s respective 21.18% and 46.30% gains. This performance suggests that despite recent operational challenges, the stock has rewarded patient investors over extended periods.

Quality Assessment and Outlook

Despite the upgrade to Strong Sell, the overall quality grade remains weak. The company’s Mojo Score stands at 28.0, with a Mojo Grade of Strong Sell, downgraded from Sell on 16 June 2026. This reflects the combination of weak financial fundamentals, modest profitability, and mixed technical signals.

Thirani Projects’ flat quarterly performance and low EPS highlight ongoing operational challenges. The company’s ROE and ROCE remain below industry averages, limiting its ability to generate shareholder value. While valuation metrics suggest the stock is attractively priced, the lack of growth and weak financial trends temper enthusiasm.

Investors should note that the stock’s micro-cap status and majority non-institutional ownership may contribute to higher volatility and lower liquidity, increasing investment risk.

Conclusion: Cautious Stance Recommended

The upgrade of Thirani Projects Ltd’s rating to Strong Sell reflects a cautious stance amid mixed signals. While technical indicators show some short-term improvement and valuation metrics have become more attractive, the company’s weak financial trend and poor quality fundamentals remain significant concerns.

Market-beating returns over longer horizons offer some consolation, but the recent profit decline and flat quarterly results suggest limited near-term catalysts. Investors should weigh the valuation discount against the operational risks and consider alternative NBFC stocks with stronger growth and financial profiles.

Overall, the Strong Sell rating advises prudence, signalling that the stock is not currently favoured for accumulation despite pockets of positive momentum.

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