Understanding the Current Rating
The Strong Sell rating assigned to Tirupati Sarjan Ltd indicates a cautious stance for investors, signalling significant concerns about the company’s financial health and market prospects. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment, helping investors understand the risks and potential rewards associated with the stock.
Quality Assessment
As of 05 February 2026, Tirupati Sarjan Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with an average Return on Capital Employed (ROCE) of just 7.89%. This figure suggests that the company is generating limited returns on the capital invested in its operations, which is a critical indicator of operational efficiency and profitability. Furthermore, the company’s net sales have grown at a modest annual rate of 14.47% over the past five years, while operating profit growth has been negligible at 1.30%. These figures highlight challenges in scaling profitability despite some revenue growth.
Valuation Perspective
From a valuation standpoint, Tirupati Sarjan Ltd appears very attractive as of today. The stock’s low market capitalisation, classified as a microcap, often implies higher risk but can also present opportunities for value investors if the company’s fundamentals improve. However, the attractive valuation is tempered by the company’s financial and operational challenges, which may limit upside potential in the near term.
Financial Trend and Stability
The financial trend for Tirupati Sarjan Ltd is negative. The company reported disappointing quarterly results in September 2025, with net sales falling by 22.92% to ₹37.83 crores. Profit before tax excluding other income (PBT less OI) was at a low ₹1.06 crore, and earnings per share (EPS) dropped to ₹0.31, marking the lowest levels in recent periods. Additionally, the company’s ability to service debt is a concern, with a high Debt to EBITDA ratio of 4.31 times, indicating significant leverage and potential liquidity risks.
Technical Analysis
Technically, the stock is in a bearish phase. Despite some short-term gains—such as a 7.53% increase in the last trading day and a 16.16% rise over the past week—the overall trend remains negative. The stock has delivered a -32.64% return over the last year and underperformed the BSE500 index over the past three years, one year, and three months. This sustained underperformance reflects investor scepticism and weak market sentiment towards the company.
Stock Returns and Market Performance
As of 05 February 2026, Tirupati Sarjan Ltd’s stock returns present a mixed picture. While the stock has shown some short-term resilience with a 9.67% gain year-to-date and a 5.57% increase over the past month, these gains are overshadowed by longer-term declines. The six-month return stands at -17.36%, and the three-month return is -13.52%, underscoring ongoing challenges in regaining investor confidence.
Implications for Investors
The Strong Sell rating suggests that investors should exercise caution when considering Tirupati Sarjan Ltd. The company’s below-average quality, negative financial trends, and bearish technical outlook outweigh the appeal of its attractive valuation. Investors seeking stability and growth may find better opportunities elsewhere, while those with a higher risk tolerance might monitor the stock for potential turnaround signals.
Summary of Key Metrics as of 05 February 2026
- Mojo Score: 17.0 (Strong Sell)
- Market Capitalisation: Microcap
- Return on Capital Employed (ROCE): 7.89%
- Debt to EBITDA Ratio: 4.31 times
- Net Sales Growth (5 years CAGR): 14.47%
- Operating Profit Growth (5 years CAGR): 1.30%
- Stock Returns: 1 Year -32.64%, YTD +9.67%
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Contextualising the Rating Within the Realty Sector
Within the realty sector, Tirupati Sarjan Ltd’s performance is notably weaker than many peers. The sector has witnessed varied recovery patterns post-pandemic, with some companies benefiting from renewed demand and government incentives. However, Tirupati Sarjan’s weak operational metrics and high leverage place it at a disadvantage. Investors analysing realty stocks should weigh these factors carefully, considering both sectoral trends and company-specific fundamentals.
Conclusion: What the Strong Sell Rating Means Today
In summary, the Strong Sell rating for Tirupati Sarjan Ltd reflects a comprehensive assessment of its current financial health and market outlook as of 05 February 2026. While the stock’s valuation may appear attractive, the company’s below-average quality, negative financial trends, and bearish technical signals present significant risks. Investors are advised to approach this stock with caution, recognising that the rating signals a recommendation to avoid or reduce exposure until there is clear evidence of improvement in the company’s fundamentals and market performance.
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