Tirupati Foam Ltd Upgraded to Sell on Technical Improvement Despite Lingering Fundamental Concerns

Quality Assessment: Weak Fundamentals Persist

Tirupati Foam’s quality rating remains subdued due to its underwhelming financial performance over recent years. The company reported flat financial results in the second quarter of FY25-26, with net sales at a low ₹22.88 crores. Its long-term fundamental strength is weak, as evidenced by an average Return on Capital Employed (ROCE) of just 9.24%, which is below industry standards for sustainable profitability.

Growth metrics further highlight concerns: net sales have grown at a modest annual rate of 11.00% over the past five years, while operating profit has barely increased, registering a negligible 0.10% growth. This stagnation in profitability undermines the company’s ability to generate shareholder value over the long term.

Additionally, the company’s debt servicing capacity is limited, with a high Debt to EBITDA ratio of 5.07 times, signalling elevated financial risk. This leverage level constrains Tirupati Foam’s flexibility to invest in growth or weather economic downturns.

Valuation: Attractive Yet Risky

Despite fundamental weaknesses, Tirupati Foam’s valuation metrics present a somewhat attractive picture. The company trades at a discount relative to its peers, with an Enterprise Value to Capital Employed ratio of 1.1, indicating that the market is pricing in its challenges. The stock’s Price/Earnings to Growth (PEG) ratio stands at 2.7, which is on the higher side, reflecting expectations of limited earnings growth relative to its price.

Its current price of ₹91.00 is significantly below its 52-week high of ₹136.00, but comfortably above the 52-week low of ₹67.31, suggesting some price stability. However, the stock’s returns have been disappointing over the medium term, with a negative 22.95% return over the last year, underperforming the BSE500 index and the broader Sensex.

Financial Trend: Flat to Negative Performance

The financial trend for Tirupati Foam remains largely flat to negative. The company’s quarterly results have shown stagnation, with net sales at their lowest in recent quarters. Profit growth has been minimal, with only a 6.8% increase in profits over the past year despite the stock’s negative return of nearly 23% in the same period.

Long-term returns also paint a challenging picture. Over the last five years, Tirupati Foam has delivered a 40.87% return, which pales in comparison to the Sensex’s 66.82% gain. Over ten years, the stock’s cumulative return of 131.85% is significantly below the Sensex’s 233.68%, underscoring its underperformance relative to the broader market.

These trends highlight the company’s struggle to generate consistent growth and shareholder value, which remains a key concern for investors.

Technicals: Mild Improvement Spurs Upgrade

The primary catalyst for the recent upgrade from Strong Sell to Sell is the improvement in technical indicators. Tirupati Foam’s technical grade has shifted from bearish to mildly bearish, signalling a less negative market sentiment.

Key technical metrics include:

• MACD: Weekly remains bearish, but monthly has improved to mildly bearish.


• RSI: Both weekly and monthly show no clear signal, indicating neutral momentum.


• Bollinger Bands: Mildly bearish on both weekly and monthly charts, suggesting reduced volatility pressure.


• Moving Averages: Daily moving averages are mildly bearish, reflecting a cautious short-term outlook.


• KST (Know Sure Thing): Weekly is bearish, monthly mildly bearish, indicating some momentum improvement.


• Dow Theory: Weekly is mildly bullish, a positive sign, while monthly shows no trend.


• On-Balance Volume (OBV): Mildly bearish on both weekly and monthly, reflecting moderate selling pressure.

These mixed but improving technical signals have encouraged analysts to revise the rating upwards, reflecting a potential stabilisation in the stock’s price action.

Stock Price and Market Context

On 26 January 2026, Tirupati Foam’s stock closed at ₹91.00, up 3.41% from the previous close of ₹88.00. The stock’s intraday range was narrow, with both the high and low at ₹91.00, indicating a firm price level. Despite this short-term strength, the stock remains well below its 52-week high of ₹136.00.

Comparing returns with the Sensex reveals a mixed picture. While Tirupati Foam outperformed the Sensex over the past week (+4.60% vs. -2.43%) and month (+2.01% vs. -4.66%), it has lagged significantly over the one-year (-22.95% vs. +6.56%), three-year (+7.12% vs. +33.80%), and five-year (+40.87% vs. +66.82%) periods.

This divergence highlights the stock’s recent recovery on technical grounds but persistent fundamental underperformance relative to the broader market.

Ownership and Industry Position

Tirupati Foam operates within the Furniture and Home Furnishing sector, classified under the miscellaneous industry category. The company’s majority shareholders are promoters, which often implies stable control but also concentrates risk.

Its Mojo Score currently stands at 31.0, with a Mojo Grade of Sell, upgraded from Strong Sell on 23 January 2026. The Market Cap Grade is 4, indicating a mid-sized market capitalisation relative to peers.

While the company’s valuation is attractive, the weak financial trend and quality metrics limit its appeal. Investors should weigh the recent technical improvements against the company’s fundamental challenges before considering exposure.

Conclusion: A Cautious Upgrade Amid Mixed Signals

The upgrade of Tirupati Foam Ltd’s investment rating from Strong Sell to Sell reflects a nuanced view of the company’s prospects. Technical indicators have improved sufficiently to warrant a less negative stance, signalling potential price stabilisation and short-term recovery.

However, the company’s weak financial performance, limited growth, and high leverage remain significant headwinds. Valuation metrics suggest the stock is priced attractively, but the risk of continued underperformance relative to the broader market persists.

Investors should approach Tirupati Foam with caution, recognising that while technical trends have improved, fundamental weaknesses continue to constrain the stock’s long-term upside potential.

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