Rating Overview and Context
On 27 October 2025, MarketsMOJO revised the rating for Tourism Finance Corporation of India Ltd from 'Hold' to 'Sell', accompanied by a decrease in its Mojo Score from 50 to 43. This adjustment reflects a reassessment of the company’s overall investment appeal based on a comprehensive evaluation of its quality, valuation, financial trend, and technical indicators. It is important to note that while the rating change occurred in late 2025, the data and performance metrics referenced in this article are current as of 01 February 2026, ensuring investors receive the latest insights.
Here’s How the Stock Looks Today
As of 01 February 2026, Tourism Finance Corporation of India Ltd remains a small-cap player within the finance sector. The stock has delivered a remarkable 136.19% return over the past year, with a 6-month gain of 19.74% and a year-to-date increase of 4.16%. Despite these strong price movements, the company’s underlying fundamentals and valuation metrics present a more cautious picture for investors.
Quality Assessment
The company’s quality grade is classified as below average. This assessment is driven primarily by weak long-term fundamental strength. The average Return on Equity (ROE) stands at 9.16%, which is modest and indicates limited efficiency in generating shareholder returns relative to equity invested. Furthermore, the company’s net sales have grown at a sluggish annual rate of just 0.62%, while operating profit has increased by a mere 1.12% annually. These figures suggest that the company’s growth trajectory is subdued, raising concerns about its ability to sustain earnings momentum over the long term.
Valuation Considerations
Valuation is a critical factor underpinning the current 'Sell' rating. Tourism Finance Corporation of India Ltd is deemed very expensive, trading at a Price to Book Value (P/BV) ratio of 2.4. This premium valuation is notable given the company’s modest ROE and limited growth prospects. Compared to its peers, the stock’s valuation appears stretched, which may limit upside potential and increase downside risk if growth expectations are not met. The Price/Earnings to Growth (PEG) ratio of 2 further indicates that the stock’s price is high relative to its earnings growth, signalling potential overvaluation.
Financial Trend Analysis
Despite the valuation concerns, the company’s financial grade is positive, reflecting some encouraging signs in recent financial trends. Over the past year, profits have risen by 13.6%, which is a healthy improvement relative to the slow sales growth. This suggests that the company has been able to enhance operational efficiency or benefit from favourable market conditions. However, this positive financial trend is tempered by the overall weak growth in sales and the expensive valuation, which together constrain the stock’s attractiveness.
Technical Outlook
The technical grade for Tourism Finance Corporation of India Ltd is mildly bullish. The stock has shown resilience with a 1-day gain of 1.99% and a 1-week increase of 11.62%. However, short-term price movements have been mixed, with a 1-month decline of 1.61% and a 3-month drop of 1.52%. These fluctuations indicate some volatility and uncertainty in market sentiment. While the technical indicators suggest some buying interest, they do not fully offset the concerns raised by valuation and quality metrics.
Additional Market Insights
Another noteworthy aspect is the absence of domestic mutual fund holdings in the company, with a reported 0% stake. Domestic mutual funds typically conduct thorough research and tend to invest in companies with solid fundamentals and growth prospects. Their lack of participation may reflect discomfort with the current price levels or the business model, reinforcing the cautious stance on the stock.
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What the 'Sell' Rating Means for Investors
MarketsMOJO’s 'Sell' rating on Tourism Finance Corporation of India Ltd signals a cautious approach for investors. It suggests that the stock currently carries elevated risks relative to its potential rewards, primarily due to its expensive valuation and below-average quality metrics. Investors should be aware that while the stock price has appreciated significantly over the past year, this performance is not fully supported by robust earnings growth or strong fundamentals.
For those considering investment, the rating advises careful scrutiny of the company’s financial health and market position. The positive financial trend and mild technical bullishness offer some counterbalance, but the overall outlook remains subdued. Investors seeking stable growth and value may find more compelling opportunities elsewhere in the finance sector or broader market.
Summary
In summary, Tourism Finance Corporation of India Ltd is rated 'Sell' by MarketsMOJO as of the latest update on 27 October 2025. The current analysis as of 01 February 2026 highlights a company with modest growth, expensive valuation, and mixed technical signals. While the stock has delivered strong returns recently, the underlying fundamentals and valuation caution investors to approach with prudence. This rating serves as a guide to help investors align their portfolios with risk tolerance and investment objectives in the evolving market landscape.
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