Thomas Scott India Ltd is Rated Hold

Current Rating and Its Significance

The 'Hold' rating assigned to Thomas Scott India Ltd indicates a neutral stance for investors. It suggests that while the stock is not currently a strong buy, it also does not warrant a sell recommendation. Investors are advised to maintain their existing positions and monitor the company’s performance closely. This rating reflects a balance between the company’s strengths and challenges, as assessed across multiple parameters including quality, valuation, financial trends, and technical indicators.

Quality Assessment

As of 28 February 2026, Thomas Scott India Ltd demonstrates a good quality grade. The company has shown a robust ability to service its debt, with a low Debt to EBITDA ratio of 1.37 times, indicating manageable leverage and financial stability. Additionally, the firm has maintained positive results for 12 consecutive quarters, underscoring consistent operational performance. The latest quarterly figures reveal the highest net sales at ₹66.25 crores, a profit after tax (PAT) of ₹5.21 crores, and earnings per share (EPS) of ₹3.39, all marking record highs for the company. These factors contribute to a solid quality foundation for the stock.

Valuation Perspective

The valuation grade for Thomas Scott India Ltd is currently assessed as fair. The company’s return on capital employed (ROCE) stands at 16.2%, which is a respectable figure within its sector. The enterprise value to capital employed ratio is 3.2, suggesting that the stock is trading at a discount relative to its peers’ historical valuations. Despite this, the stock’s price performance has lagged behind the broader market, with a one-year return of -17.84% compared to the BSE500’s positive 13.63% over the same period. The price-to-earnings-growth (PEG) ratio of 1.3 indicates that the stock’s valuation is reasonable when considering its earnings growth potential, making it an attractive option for investors seeking value within the garments and apparels sector.

Financial Trend Analysis

Financially, Thomas Scott India Ltd is rated very positive. The company has exhibited strong long-term growth, with net sales increasing at an annual rate of 69.97% and operating profit growing by 94.90%. The latest data as of 28 February 2026 shows a 16.37% growth in net sales, reflecting sustained momentum in business operations. Profitability has also improved significantly, with profits rising by 56.5% over the past year. This positive financial trajectory supports the current 'Hold' rating, signalling that the company is on a solid footing despite recent stock price underperformance.

Technical Outlook

From a technical standpoint, the stock is currently graded as bearish. Recent price movements show a decline of 0.75% on the day, with a one-month drop of 1.31% and a three-month decline of 12.87%. The six-month and year-to-date returns are also negative at -10.05% and -3.71% respectively. This bearish technical trend suggests caution for short-term traders, as the stock has underperformed the broader market indices. However, the technical weakness is somewhat offset by the company’s strong fundamentals and financial health, which may provide a base for future recovery.

Market Position and Shareholding

Thomas Scott India Ltd operates within the garments and apparels sector as a microcap company. The majority shareholding is held by promoters, which often indicates stable management control and alignment of interests with shareholders. Despite the stock’s underperformance relative to the BSE500 index, the company’s operational and financial strengths provide a foundation for potential value realisation over time.

Investor Implications

For investors, the 'Hold' rating on Thomas Scott India Ltd suggests a measured approach. The company’s strong financial trend and good quality metrics provide confidence in its operational resilience. However, the fair valuation and bearish technical signals imply that the stock may not offer immediate upside potential. Investors currently holding the stock should consider maintaining their positions while monitoring market developments and company performance closely. New investors might wait for clearer technical signals or further valuation improvements before initiating positions.

Summary of Key Metrics as of 28 February 2026

To summarise, the stock’s key metrics include a Mojo Score of 53.0, reflecting its 'Hold' grade. The company’s net sales growth rate of nearly 70% annually and operating profit growth of almost 95% highlight robust business expansion. The low Debt to EBITDA ratio of 1.37 times underscores financial prudence. Despite a one-year stock return of -17.84%, the company’s profits have increased by 56.5%, indicating a disconnect between market price and underlying fundamentals. This comprehensive view supports the current rating and provides a balanced perspective for investors.

Looking Ahead

While the stock has underperformed the broader market over the past year, Thomas Scott India Ltd’s strong fundamentals and positive financial trends suggest potential for recovery and value creation. Investors should keep an eye on upcoming quarterly results and sector developments to reassess the stock’s outlook. The current 'Hold' rating reflects this cautious optimism, balancing the company’s strengths against prevailing market conditions.

Conclusion

Thomas Scott India Ltd’s 'Hold' rating by MarketsMOJO, last updated on 09 February 2026, is grounded in a thorough analysis of quality, valuation, financial trends, and technical factors as of 28 February 2026. This rating advises investors to maintain existing holdings while remaining vigilant to market signals. The company’s solid financial health and growth prospects provide a foundation for potential future gains, even as short-term technical challenges persist.

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