TVS Srichakra Ltd is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for TVS Srichakra Ltd indicates a neutral stance on the stock, suggesting that investors should maintain their existing positions rather than aggressively buying or selling. This rating reflects a balance between the company’s strengths and challenges, signalling that while the stock may not offer significant upside in the near term, it also does not warrant a sell recommendation. The rating was adjusted from 'Sell' to 'Hold' on 11 Nov 2025, following an improvement in the company’s overall mojo score from 47 to 55, signalling a modest enhancement in its investment appeal.

Here’s How TVS Srichakra Looks Today

As of 21 January 2026, TVS Srichakra Ltd operates within the Tyres & Rubber Products sector as a small-cap company. The latest data shows a mixed performance across key parameters, which collectively justify the current 'Hold' rating.

Quality Assessment

The company’s quality grade is assessed as average. This reflects moderate operational efficiency and profitability metrics. For instance, the average Return on Equity (ROE) stands at 7.27%, indicating relatively low profitability generated per unit of shareholders’ funds. Additionally, the company’s ability to service its debt remains constrained, with a high Debt to EBITDA ratio of 2.90 times. This elevated leverage level suggests potential risks in meeting long-term obligations, which tempers the overall quality outlook.

Valuation Perspective

TVS Srichakra’s valuation is considered fair as of the current date. The stock trades at an Enterprise Value to Capital Employed (EV/CE) ratio of approximately 1.9, which is below the average historical valuations of its peers. This discount could be attractive to value-oriented investors. However, the company’s Return on Capital Employed (ROCE) is modest at 4.5%, reflecting limited capital efficiency. The fair valuation grade suggests that while the stock is not expensive, it is not undervalued enough to warrant a strong buy recommendation.

Financial Trend Analysis

The financial trend for TVS Srichakra is currently flat. Over the past five years, net sales have grown at a compound annual growth rate (CAGR) of 14.57%, and operating profit has increased at 12.44% annually. Despite this moderate growth, recent results have shown softness. The company’s profit after tax (PAT) for the nine months ended September 2025 declined by 41.67% to ₹27.42 crores. Operating cash flow for the year is at a low ₹197.33 crores, and the half-year ROCE dropped to 4.91%, the lowest in recent periods. These figures highlight challenges in sustaining profitability and cash generation momentum.

Technical Outlook

From a technical standpoint, the stock exhibits mildly bullish characteristics. Despite short-term volatility, the stock has delivered a one-year return of 18.61%, outperforming the broader market benchmark BSE500, which returned 6.78% over the same period. However, the stock has experienced recent downward pressure, with a one-month decline of 10.15% and a year-to-date drop of 9.71%. This mixed technical picture supports a cautious stance, consistent with the 'Hold' rating.

Market Performance and Investor Considerations

Investors should note that while TVS Srichakra has outperformed the market in terms of stock returns over the past year, its underlying profitability has weakened significantly, with profits falling by 61.3%. This divergence between price performance and earnings highlights the importance of a balanced approach when considering the stock. The 'Hold' rating reflects this nuanced view, advising investors to monitor developments closely without making drastic portfolio changes.

Summary and Outlook

In summary, TVS Srichakra Ltd’s current 'Hold' rating by MarketsMOJO reflects a balanced assessment of its operational quality, valuation, financial trends, and technical signals as of 21 January 2026. The company demonstrates moderate growth and fair valuation but faces challenges in profitability and debt servicing capacity. The stock’s recent market-beating returns are tempered by declining earnings, suggesting that investors should adopt a watchful approach.

For investors, the 'Hold' rating implies maintaining existing positions while awaiting clearer signs of sustained financial improvement or valuation re-rating. It is advisable to monitor upcoming quarterly results and debt metrics closely, as these will be critical in determining whether the stock can transition to a more favourable rating in the future.

Key Metrics at a Glance (As of 21 January 2026):

• Mojo Score: 55.0 (Hold)


• Debt to EBITDA Ratio: 2.90 times


• Return on Equity (avg): 7.27%


• Net Sales CAGR (5 years): 14.57%


• Operating Profit CAGR (5 years): 12.44%


• PAT (9M Sep 2025): ₹27.42 crores (-41.67%)


• Operating Cash Flow (Year): ₹197.33 crores (lowest)


• ROCE (Half Year): 4.91% (lowest)


• Enterprise Value to Capital Employed: 1.9


• 1-Year Stock Return: +18.61%


• BSE500 1-Year Return: +6.78%

Investment Implications

Given the current fundamentals and market context, TVS Srichakra Ltd is positioned as a stock for investors who prefer a cautious stance with moderate risk tolerance. The 'Hold' rating suggests that while the stock is not an immediate buy, it remains a viable option for those seeking exposure to the tyres and rubber products sector without aggressive speculation.

Investors should continue to evaluate the company’s ability to improve profitability and manage debt levels effectively. Any significant improvement in these areas could prompt a reassessment of the rating in the future.

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