Current Rating Overview
MarketsMOJO’s Strong Sell rating for TIL Ltd indicates a cautious stance for investors, signalling concerns across multiple key parameters. The rating was revised to Strong Sell on 22 September 2025, reflecting a significant drop in the Mojo Score from 36 to 13. This score, which measures overall company health and market sentiment, places TIL Ltd firmly in the lower tier of investment attractiveness within the automobile sector.
Quality Assessment
As of 13 February 2026, TIL Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with net sales growing at a modest annual rate of 2.11% over the past five years. Operating profit growth, while somewhat stronger at 15.09% annually, is insufficient to offset concerns about profitability and operational efficiency. The average Return on Equity (ROE) stands at a low 3.27%, indicating limited profitability relative to shareholders’ funds. This suggests that the company struggles to generate adequate returns on invested capital, a critical factor for sustainable growth.
Valuation Considerations
Valuation metrics as of today paint a challenging picture for TIL Ltd. The stock is classified as very expensive, trading at an enterprise value to capital employed (EV/CE) ratio of 5.5, despite a Return on Capital Employed (ROCE) of just 0.3%. This disparity implies that investors are paying a premium for capital that is not generating commensurate returns. Although the stock trades at a discount relative to its peers’ historical valuations, the high valuation combined with weak profitability metrics raises concerns about the stock’s price sustainability.
Financial Trend Analysis
The latest financial data as of 13 February 2026 reveals a deteriorating trend in TIL Ltd’s earnings and cash flows. The company reported negative operating cash flow for the year, with the lowest figure recorded at ₹-130.67 crores. Profit Before Tax (PBT) excluding other income for the quarter fell sharply by 71.55% to ₹-12.42 crores, while the net profit after tax (PAT) plunged by 261.2% to ₹-7.73 crores. These figures highlight significant operational challenges and a worsening profitability profile. Additionally, the company carries a high debt burden, with an average debt-to-equity ratio of 3.06 times, which exacerbates financial risk and limits flexibility for future investments or debt servicing.
Technical Outlook
From a technical perspective, TIL Ltd’s stock exhibits a mildly bearish trend. The stock’s recent price movements show mixed returns: a slight decline of 0.06% on the latest trading day, a 4.84% gain over the past week, but a 10.07% loss over six months. Year-to-date, the stock is down 4.11%, though it has delivered a 25.94% return over the past year. Despite this positive one-year return, the underlying fundamentals and technical indicators suggest caution. The mild bearish technical grade reflects investor uncertainty and potential downward pressure in the near term.
Investor Implications
For investors, the Strong Sell rating signals that TIL Ltd currently faces significant headwinds. The combination of weak quality metrics, expensive valuation relative to returns, negative financial trends, and cautious technical signals suggests that the stock may underperform in the near to medium term. The company’s high leverage and poor profitability metrics increase risk, particularly in a sector as competitive and capital-intensive as automobiles.
Moreover, the absence of domestic mutual fund holdings in TIL Ltd is notable. These funds typically conduct thorough research and tend to invest in companies with solid fundamentals and growth prospects. Their lack of exposure may indicate a lack of confidence in the company’s current valuation or business outlook.
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Summary of Key Metrics as of 13 February 2026
TIL Ltd’s financial and market data as of today reinforce the rationale behind the Strong Sell rating:
- Mojo Score: 13.0 (Strong Sell grade)
- Debt to Equity Ratio (average): 3.06 times, indicating high leverage
- Return on Equity (average): 3.27%, reflecting low profitability
- Operating Cash Flow (yearly): ₹-130.67 crores, signalling cash flow stress
- PBT excluding other income (quarterly): ₹-12.42 crores, down 71.55%
- PAT (quarterly): ₹-7.73 crores, down 261.2%
- Valuation: EV/CE ratio of 5.5 with ROCE at 0.3%
- Stock Returns: 1 year +25.94%, 6 months -10.07%, YTD -4.11%
These figures highlight a company under pressure, with financial weakness and valuation concerns outweighing recent stock price gains. Investors should carefully consider these factors when evaluating TIL Ltd’s prospects.
What the Strong Sell Rating Means for Investors
A Strong Sell rating from MarketsMOJO advises investors to exercise caution and consider reducing exposure or avoiding new investments in TIL Ltd at this time. The rating reflects a comprehensive assessment of the company’s quality, valuation, financial health, and technical outlook, all of which currently point to elevated risk and limited upside potential.
Investors seeking to manage risk in their portfolios may view this rating as a signal to reallocate capital towards companies with stronger fundamentals and more favourable valuations. It is important to monitor ongoing developments and financial results to reassess the company’s outlook as new data becomes available.
In summary, while TIL Ltd remains a listed player in the automobile sector, its current financial and market profile justifies a Strong Sell stance, underscoring the need for prudence and thorough analysis before considering any investment.
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