York Exports Ltd Upgraded to Hold on Attractive Valuation and Improved Financials

Valuation Upgrade Drives Rating Change

The primary catalyst for the upgrade was a significant improvement in York Exports’ valuation grade, which shifted from fair to attractive. The company’s price-to-earnings (PE) ratio is currently an exceptionally low 2.07, well below many of its peers in the industry. For context, competitors such as Himatsingka Seide and Indo Rama Synthetic report PE ratios of 8.33 and 8.03 respectively, while several others trade at substantially higher multiples.

Other valuation multiples reinforce this attractive pricing. The price-to-book value stands at 0.73, indicating the stock is trading below its net asset value. Enterprise value to EBITDA is 17.82, and EV to capital employed is a notably low 0.90, suggesting efficient capital utilisation relative to market valuation. The PEG ratio is effectively zero, reflecting minimal expected earnings growth priced in by the market.

Despite these attractive valuation metrics, the company’s return on capital employed (ROCE) remains modest at 3.65%, while return on equity (ROE) is a robust 35.21%. This disparity suggests that while the company is generating strong returns on shareholder equity, its overall capital efficiency is still developing.

Financial Trend: Mixed but Improving

York Exports has demonstrated positive financial performance in recent quarters, particularly in Q2 FY25-26. The company reported a return on capital employed (ROCE) of 17.33% for the half-year period, a significant improvement over its long-term average of 5.82%. Profit after tax (PAT) for the nine months ended December 2025 rose to ₹5.01 crores, while profit before tax (PBT) excluding other income reached ₹4.73 crores, both marking highs for the period.

However, the company’s long-term growth remains subdued. Net sales have grown at a modest compound annual growth rate (CAGR) of 3.99% over the past five years, and operating profit has increased at 11.80% annually. These figures suggest that while recent quarters have been encouraging, sustained growth acceleration is yet to be firmly established.

Debt servicing capacity remains a concern, with a high debt-to-EBITDA ratio of 7.64 times, indicating leverage risk. This elevated debt burden could constrain future financial flexibility and warrants close monitoring by investors.

Technical Analysis and Market Performance

From a technical perspective, York Exports has experienced volatility in recent trading sessions. On 10 February 2026, the stock closed at ₹55.10, down 5.89% from the previous close of ₹58.55. The intraday range was ₹54.20 to ₹61.85, reflecting significant price swings. The 52-week high and low stand at ₹79.00 and ₹40.00 respectively, indicating a wide trading band over the past year.

Year-to-date, the stock has declined by 18.82%, underperforming the Sensex, which is down 1.36% over the same period. However, over the last one year, York Exports has delivered a total return of 14.55%, outperforming the Sensex’s 7.97% gain. Longer-term returns are even more impressive, with a five-year return of 586.18% and a ten-year return exceeding 1,000%, underscoring the company’s potential for wealth creation despite recent setbacks.

Quality Assessment: Hold with Caution

York Exports’ quality rating remains cautious, reflected in its Mojo Grade of Hold. The company’s operational efficiency and capital returns have improved recently, but the weak long-term fundamental strength tempers enthusiasm. The average ROCE of 5.82% over the years is below industry expectations, and the slow sales growth rate highlights challenges in scaling operations.

Promoters retain majority ownership, which can be a positive governance signal, but the company’s high leverage and modest profitability metrics suggest that investors should remain vigilant. The financial trend improvement is encouraging but not yet sufficient to warrant a Buy rating.

Summary and Outlook

The upgrade of York Exports Ltd from Sell to Hold is primarily driven by its attractive valuation metrics and recent improvements in financial performance. The stock’s low PE ratio of 2.07 and price-to-book of 0.73 position it favourably against peers, while recent quarterly results have shown encouraging profitability gains.

Nevertheless, investors should weigh these positives against the company’s weak long-term growth trends, high leverage, and recent price volatility. The technical indicators suggest caution, especially given the stock’s underperformance relative to the Sensex year-to-date.

For investors with a medium-term horizon, York Exports offers a potentially undervalued opportunity in the Gems, Jewellery and Watches sector, but it remains a Hold rather than a Buy at this stage. Continued monitoring of debt levels, sales growth, and capital efficiency will be critical to reassessing the company’s investment appeal in coming quarters.

Comparative Industry Context

Within the Gems, Jewellery and Watches sector, York Exports’ valuation stands out as particularly attractive. Many peers trade at significantly higher multiples, with companies like R&B Denims and SBC Exports classified as very expensive, sporting PE ratios above 40 and EV/EBITDA multiples exceeding 30. This valuation gap reflects market scepticism about York Exports’ growth prospects but also highlights potential upside if the company can sustain its recent financial improvements.

Investors should also consider the company’s relative performance against the broader textile industry, where York Exports operates. While the stock has delivered strong long-term returns, its recent underperformance relative to the Sensex and sector peers suggests that selective exposure is warranted.

Final Considerations

York Exports Ltd’s upgrade to Hold by MarketsMOJO on 9 February 2026 reflects a nuanced view balancing attractive valuation against mixed financial and technical signals. The company’s current Mojo Score of 50.0 and Market Cap Grade of 4 indicate a mid-cap stock with moderate risk and reward potential.

Investors should remain attentive to quarterly earnings updates, debt management strategies, and sector dynamics to gauge whether York Exports can convert its valuation advantage into sustained market outperformance.

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