Understanding the Current Rating
The Strong Sell rating assigned to True Green Bio Energy Ltd indicates a cautious stance for investors, signalling significant concerns across multiple key parameters. This rating suggests that the stock is expected to underperform relative to the broader market and peers, and investors should carefully consider the risks before exposure.
Quality Assessment
As of 28 January 2026, the company’s quality grade remains below average. Over the past five years, True Green Bio Energy has experienced a compound annual growth rate (CAGR) in net sales of -33.66%, highlighting a persistent decline in core business performance. This weak long-term fundamental strength is compounded by a low average return on equity (ROE) of 3.30%, indicating limited profitability generated from shareholders’ funds. Additionally, the company’s ability to service debt is strained, with a Debt to EBITDA ratio of 40.37 times, signalling high leverage and financial risk.
Valuation Considerations
The valuation grade for True Green Bio Energy Ltd is classified as very expensive. Despite the company’s subdued operational performance, the stock trades at an enterprise value to capital employed (EV/CE) ratio of 1.2, which is high relative to its return on capital employed (ROCE) of just 0.1%. This disparity suggests that investors are paying a premium for limited returns, raising concerns about the stock’s price sustainability. While the stock is trading at a discount compared to its peers’ average historical valuations, this is insufficient to offset the underlying financial weaknesses.
Financial Trend Analysis
The financial trend for True Green Bio Energy Ltd is currently flat. The latest nine-month results ending September 2025 show net sales of ₹12.30 crores, reflecting a decline of 33.04% compared to the previous period. Profit after tax (PAT) also mirrors this trend, standing at ₹0.10 crore with a similar negative growth rate of 33.04%. Despite these flat results, the company’s profits have risen by 56.5% over the past year, a positive sign that has not yet translated into broader financial strength or stock price recovery.
Technical Outlook
The technical grade for the stock is bearish, reflecting negative momentum in price action. Over the last year, True Green Bio Energy Ltd has underperformed significantly, delivering a return of -44.08%, while the broader BSE500 index has generated a positive return of 9.26%. Shorter-term price movements also show volatility, with a 3-month decline of 17.28% and a 6-month drop of 10.52%. The stock’s promoter shareholding is another concern, with 57.5% of promoter shares pledged, which can exert additional downward pressure on the stock price in falling markets.
Stock Performance Snapshot
As of 28 January 2026, the stock has shown mixed short-term movements: a 1-day gain of 0.49%, a 1-week increase of 6.08%, and a 1-month rise of 5.70%. However, these gains are overshadowed by longer-term declines, including a 3-month loss of 17.28%, a 6-month loss of 10.52%, and a year-to-date gain of only 0.81%. The stark contrast between short-term volatility and sustained long-term underperformance underscores the challenges facing the company.
Implications for Investors
The Strong Sell rating reflects a comprehensive evaluation of True Green Bio Energy Ltd’s current financial health, valuation, and market dynamics. Investors should interpret this rating as a cautionary signal, indicating that the stock carries elevated risks and is likely to continue underperforming unless there is a significant turnaround in fundamentals or market sentiment. The combination of weak quality metrics, expensive valuation, flat financial trends, and bearish technical indicators suggests limited upside potential in the near term.
For investors seeking to manage risk, this rating advises careful scrutiny of the company’s financial disclosures and market developments before considering any position. It also highlights the importance of monitoring promoter share pledging and debt servicing capacity, which remain critical risk factors.
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Sector and Market Context
True Green Bio Energy Ltd operates within the Garments & Apparels sector, a space that has seen varied performance across companies. While some peers have managed to sustain growth and profitability, True Green Bio Energy’s microcap status and financial challenges place it at a disadvantage. The broader market environment, as reflected by the BSE500’s positive returns, contrasts sharply with the company’s negative stock performance, emphasising the stock’s relative weakness.
Summary of Key Metrics as of 28 January 2026
To summarise, the company’s key metrics are as follows:
- Mojo Score: 16.0 (Strong Sell grade)
- Net Sales (9M Sep 2025): ₹12.30 crores, down 33.04%
- PAT (9M Sep 2025): ₹0.10 crore, down 33.04%
- Debt to EBITDA ratio: 40.37 times
- Return on Equity (avg): 3.30%
- Return on Capital Employed: 0.1%
- Enterprise Value to Capital Employed: 1.2
- Promoter Shares Pledged: 57.5%
- 1-Year Stock Return: -44.08%
- BSE500 1-Year Return: +9.26%
These figures collectively underpin the Strong Sell rating and highlight the considerable challenges the company faces in reversing its current trajectory.
Looking Ahead
Investors should continue to monitor quarterly results and any strategic initiatives that True Green Bio Energy Ltd may undertake to improve its financial health and operational efficiency. Until there is clear evidence of sustained improvement in sales growth, profitability, and debt management, the Strong Sell rating remains a prudent guide for portfolio decisions.
Conclusion
True Green Bio Energy Ltd’s Strong Sell rating by MarketsMOJO, last updated on 13 Oct 2025, reflects a thorough evaluation of the company’s current fundamentals, valuation, financial trends, and technical outlook as of 28 January 2026. The rating serves as a caution to investors about the stock’s elevated risks and limited upside potential in the near term. Careful consideration and ongoing analysis are essential for those holding or considering this stock.
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