Trident Ltd Downgraded to Strong Sell Amid Weak Technicals and Financial Trends

Technical Analysis: Shift to Bearish Momentum

The primary catalyst for the downgrade lies in the technical grade, which has shifted from mildly bearish to outright bearish. Key momentum indicators paint a cautious picture for Trident Ltd’s near-term price action. The Moving Average Convergence Divergence (MACD) is bearish on both weekly and monthly charts, signalling sustained downward momentum. Similarly, daily moving averages confirm a bearish trend, reinforcing the negative outlook.

Other technical tools provide a mixed but predominantly negative signal. Bollinger Bands indicate mild bearishness weekly and bearishness monthly, while the Relative Strength Index (RSI) remains neutral with no clear signal on weekly or monthly timeframes. The Know Sure Thing (KST) indicator is bearish weekly but mildly bullish monthly, suggesting some longer-term support may exist. However, the Dow Theory and On-Balance Volume (OBV) indicators lean mildly bearish weekly, offset slightly by mild monthly bullishness.

Overall, the technical landscape has deteriorated, reflecting increased selling pressure and weakening investor confidence. This shift has been a decisive factor in the MarketsMOJO downgrade to a Strong Sell rating, with the Mojo Score now at 28.0, down from a previous Sell grade.

Financial Trend: Mixed Signals with Recent Weakness

Trident Ltd’s recent quarterly financials have disappointed, contributing to the negative sentiment. The company reported a sharp 44.5% decline in PAT for Q3 FY25-26, falling to ₹44.24 crores. This contrasts with a robust 48.59% growth in interest costs over the last six months, which reached ₹50.43 crores, signalling rising financial expenses that are pressuring profitability.

Operating profit growth remains subdued, with a modest annualised increase of 6.54% over the past five years. The operating profit to interest coverage ratio has dropped to a low 5.31 times, indicating tighter margins for servicing debt. Despite this, Trident maintains a strong ability to service debt, reflected in a low Debt to EBITDA ratio of 1.02 times, which is a positive sign for financial stability.

Long-term returns have been disappointing relative to benchmarks. The stock has generated a negative 5.55% return over the past year, underperforming the Sensex’s 10.44% gain and the BSE500 index over multiple timeframes. Over three years, the stock has declined by 15.8%, while the Sensex rose 38.28%. However, the five- and ten-year returns remain impressive at 84.4% and 482.45% respectively, highlighting a mixed performance history.

Valuation: Attractive Yet Risky

Despite the downgrade, Trident Ltd’s valuation metrics offer some appeal. The company’s Return on Capital Employed (ROCE) stands at a respectable 10.7%, and the Enterprise Value to Capital Employed ratio is a low 2.5 times, suggesting the stock is trading at a discount relative to its peers’ historical valuations. The PEG ratio of 0.8 further indicates that the stock may be undervalued relative to its earnings growth potential.

However, the low stake held by domestic mutual funds—only 0.53%—raises questions about institutional confidence. Given their capacity for detailed research, this limited exposure may reflect concerns about the company’s near-term prospects or valuation at current levels.

Technical and Market Performance Summary

Trident’s share price closed at ₹25.89 on 25 Feb 2026, down 2.60% from the previous close of ₹26.58. The stock’s 52-week high and low stand at ₹34.60 and ₹23.20 respectively, indicating a wide trading range but recent weakness. Daily price action showed a high of ₹26.50 and a low of ₹25.61, consistent with bearish technical signals.

Comparing returns with the Sensex reveals underperformance across most periods except for the one-month window, where Trident gained 2.01% against the Sensex’s 0.84%. Year-to-date, the stock has declined 3.25%, slightly better than the Sensex’s 3.51% fall, but the longer-term trend remains negative.

Summary of Ratings and Grades

MarketsMOJO’s current Mojo Grade for Trident Ltd is Strong Sell, a downgrade from the previous Sell rating dated 24 Feb 2026. The Mojo Score has dropped to 28.0, reflecting the combined impact of deteriorating technicals, weak quarterly financials, and cautious valuation. The Market Cap Grade remains at 3, consistent with the company’s mid-sized market capitalisation within the Garments & Apparels sector.

Investment Outlook: Caution Advised

Investors should approach Trident Ltd with caution given the recent downgrade and the mixed signals from its financial and technical profiles. While the company’s long-term returns and valuation metrics offer some encouragement, the near-term outlook is clouded by weak quarterly earnings, rising interest costs, and bearish technical indicators.

The limited institutional interest further underscores the need for careful analysis before committing capital. Those considering exposure to the Garments & Apparels sector may find more compelling opportunities elsewhere, as highlighted by comparative research tools.

In conclusion, Trident Ltd’s downgrade to Strong Sell by MarketsMOJO reflects a comprehensive reassessment of its quality, valuation, financial trend, and technical outlook. Investors should weigh these factors carefully in the context of their portfolio strategy and risk tolerance.

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