Current Rating and Its Significance
MarketsMOJO’s Strong Sell rating indicates a cautious stance towards Tokyo Plast International Ltd, signalling that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Investors should interpret this rating as a warning to carefully consider the risks before investing, as the company currently faces significant challenges that may impact returns.
Quality Assessment: Below Average Fundamentals
As of 09 February 2026, Tokyo Plast International Ltd exhibits below average quality metrics. The company’s long-term fundamental strength remains weak, with an average Return on Capital Employed (ROCE) of just 2.09%. This low ROCE suggests that the company is generating limited returns on the capital invested, which is a concern for sustainable profitability. Furthermore, net sales have grown at a modest annual rate of 5.23% over the past five years, indicating sluggish top-line expansion that may not be sufficient to drive meaningful shareholder value.
Additionally, the company’s ability to service its debt is constrained, with a high Debt to EBITDA ratio of 4.09 times. This elevated leverage level increases financial risk, especially in a challenging operating environment, and limits flexibility for future investments or growth initiatives.
Valuation: Attractive but Reflective of Risks
Despite the weak fundamentals, Tokyo Plast International Ltd’s valuation is currently attractive. This suggests that the stock price has adjusted downward to reflect the company’s challenges, potentially offering value for investors willing to accept higher risk. However, an attractive valuation alone does not guarantee a turnaround, particularly when other factors such as financial trends and technical indicators remain unfavourable.
Financial Trend: Negative Momentum
The latest financial data as of 09 February 2026 reveals a negative trend. The company reported disappointing quarterly results for December 2025, with operating profit to interest coverage at a low 1.94 times, signalling tight margins and limited buffer against interest expenses. Net sales for the quarter stood at ₹17.14 crores, reflecting a decline of 9.2% compared to the previous four-quarter average. Profit before tax excluding other income was negative at ₹-0.03 crores, underscoring operational difficulties.
Moreover, Tokyo Plast International Ltd has consistently underperformed the benchmark BSE500 index over the past three years. The stock has delivered a negative return of 12.85% over the last 12 months, with declines of 7.41% over one month and 19.35% over three months, highlighting persistent downward pressure on the share price.
Technical Analysis: Bearish Signals
From a technical perspective, the stock is currently in a bearish phase. The Mojo Score has dropped sharply to 14.0, down 20 points from the previous score of 34, reinforcing the negative sentiment. The technical grade assigned is bearish, reflecting weak price momentum and a lack of positive catalysts in the near term. The stock’s day change as of 09 February 2026 was -0.25%, indicating continued selling pressure.
Implications for Investors
For investors, the Strong Sell rating suggests caution. The combination of below average quality, negative financial trends, and bearish technicals outweighs the currently attractive valuation. This implies that while the stock may appear inexpensive, the risks associated with its operational performance and financial health are significant. Investors should carefully weigh these factors and consider alternative opportunities with stronger fundamentals and more favourable outlooks.
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Summary of Key Metrics as of 09 February 2026
Tokyo Plast International Ltd remains a microcap player in the diversified consumer products sector, with a market capitalisation reflecting its small size and limited liquidity. The Mojo Grade of Strong Sell is supported by the following metrics:
- Mojo Score: 14.0 (down from 34)
- Quality Grade: Below Average
- Valuation Grade: Attractive
- Financial Grade: Negative
- Technical Grade: Bearish
- Debt to EBITDA Ratio: 4.09 times
- ROCE: 2.09%
- Net Sales Growth (5 years CAGR): 5.23%
- Operating Profit to Interest Coverage (Q4 Dec 2025): 1.94 times
- Net Sales (Q4 Dec 2025): ₹17.14 crores, down 9.2%
- PBT less Other Income (Q4 Dec 2025): ₹-0.03 crores
- Stock Returns: 1D -0.25%, 1M -7.41%, 3M -19.35%, 6M -16.53%, YTD -9.91%, 1Y -12.85%
Looking Ahead
Given the current financial and technical outlook, Tokyo Plast International Ltd faces considerable headwinds. Investors should monitor upcoming quarterly results and any strategic initiatives that may improve operational efficiency or reduce leverage. Until such improvements materialise, the Strong Sell rating remains a prudent guide for risk-averse investors.
Conclusion
In conclusion, Tokyo Plast International Ltd’s Strong Sell rating by MarketsMOJO, updated on 21 January 2026, reflects a comprehensive assessment of the company’s challenges as of 09 February 2026. While the valuation appears attractive, the combination of weak quality, negative financial trends, and bearish technical indicators suggests that the stock is likely to continue underperforming. Investors should exercise caution and consider this rating carefully in the context of their portfolio strategy.
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