National Fittings Ltd Gains 16.55%: 4 Key Factors Driving the Week’s Rally

2 February: Upgrade to Hold Boosts Confidence

National Fittings Ltd began the week on a positive note with MarketsMOJO upgrading its investment rating from 'Sell' to 'Hold' on 2 February 2026. This upgrade was driven by a marked improvement in technical indicators and strong financial metrics. The stock closed at ₹151.35, up 0.80% on the day, even as the Sensex declined 1.03%, signalling relative strength.

The technical trend shifted from bearish to mildly bearish, with monthly indicators suggesting a nascent uptrend. Financially, the company reported a 48.91% annual growth in operating profit and a 357.14% surge in profit before tax excluding other income for Q2 FY25-26. Return on capital employed (ROCE) stood at 14.43%, and profit after tax (PAT) for nine months reached ₹8.00 crore. The company’s low debt-to-equity ratio of 0.10 times underscored financial stability.

Valuation metrics were attractive, with a price-to-book value (P/BV) of 1.6 and a low PEG ratio of 0.1, indicating undervaluation relative to earnings growth. The stock’s long-term returns were impressive, outperforming the Sensex by a wide margin over three and five years.

3 February: Stock Outperforms Sensex Amid Positive Momentum

The momentum continued on 3 February as National Fittings Ltd surged 4.39% to close at ₹158.00, outperforming the Sensex’s 2.63% gain. Despite a relatively low trading volume of 449 shares, the price advance reflected growing investor interest following the upgrade and improving fundamentals.

4 February: Exceptional Q3 Profit Surge Masks Margin Concerns

On 4 February, the company reported its Q3 FY25-26 results, revealing an exceptional profit surge. The stock responded strongly, rising 8.61% to ₹171.60 on heavy volume of 3,643 shares, while the Sensex gained a modest 0.37%. Quarterly PAT grew by 181.7% to ₹2.93 crore, and operating profit expanded at an annual rate of 57.75%, underscoring operational efficiency.

Return on capital employed (ROCE) improved to 24.27%, and return on equity (ROE) reached 12.94%. Cash reserves peaked at ₹45.82 crore, providing ample liquidity. However, despite these positives, some concerns about operating margins were noted, suggesting caution in interpreting the profit surge as fully sustainable.

5 February: Downgrade to Sell Reflects Mixed Technical and Valuation Signals

Despite the strong financial results, MarketsMOJO downgraded National Fittings Ltd back to 'Sell' on 5 February 2026, reflecting mixed technical signals and evolving valuation considerations. The stock closed at ₹180.25, up 5.04% on the day, reaching intraday highs near ₹198.80, yet technical indicators painted a nuanced picture.

Weekly MACD remained bearish, while monthly indicators softened to mildly bearish. The Relative Strength Index (RSI) showed neutral momentum, and Bollinger Bands suggested potential price support. Daily moving averages were mildly bearish, and the Know Sure Thing (KST) indicator presented conflicting weekly bearish and monthly bullish signals. The Dow Theory indicated no clear trend, highlighting market indecision.

Valuation metrics remained attractive but less compelling than before, with a price-to-earnings (PE) ratio of 14.97 and price-to-book value (P/BV) of 1.94. The PEG ratio was exceptionally low at 0.09, signalling undervaluation relative to earnings growth. Compared to peers such as Synergy Green (PE 53.68) and Inv. & Prec. Castings (PE 48.11), National Fittings maintained a competitive valuation.

6 February: Valuation Shifts Signal Renewed Price Attractiveness

On the final trading day of the week, 6 February, National Fittings Ltd closed lower at ₹175.00, down 2.91% from the previous day’s close, while the Sensex inched up 0.10%. Despite the dip, the company’s valuation parameters improved, with the valuation grade shifting from very attractive to attractive.

The stock’s PE ratio of 14.97 remained comfortably below industry peers, and the P/BV ratio of 1.94 indicated reasonable pricing. Operational efficiency was underscored by a ROCE of 24.27% and ROE of 12.94%. The EV/EBITDA ratio of 9.40 was significantly lower than competitors, and the PEG ratio of 0.09 suggested the stock was undervalued relative to its earnings growth potential.

Comparative analysis showed National Fittings favourably positioned against peers such as Pradeep Metals (PE 17.26) and Nitin Castings (PE 23.96), highlighting its relative undervaluation. The company’s strong cash reserves and conservative capital structure further supported its valuation appeal despite the recent downgrade in mojo grade to Sell.

Daily Price Performance vs Sensex

Key Takeaways

Strong Weekly Outperformance: National Fittings Ltd’s 16.55% weekly gain dwarfed the Sensex’s 1.51%, reflecting robust investor interest amid improving fundamentals and technical signals.

Financial Strength: Exceptional profit growth, with quarterly PAT surging 181.7% and operating profit expanding at 57.75% annually, underpinned the stock’s rally. ROCE and ROE improvements further highlighted operational efficiency.

Technical Volatility: Mixed technical indicators, including bearish weekly MACD and neutral RSI, contributed to a downgrade from Hold to Sell midweek, signalling caution despite strong price gains.

Valuation Appeal: Despite the downgrade, valuation metrics remained attractive, with a low PE ratio of 14.97, P/BV of 1.94, and an exceptionally low PEG of 0.09, suggesting undervaluation relative to growth prospects.

Sector Comparison: National Fittings maintained competitive valuation and profitability metrics relative to peers, reinforcing its position as a fundamentally sound company within the iron and steel products sector.

Conclusion

National Fittings Ltd’s week was characterised by a strong price rally driven by improved technical and financial metrics, exceptional quarterly profit growth, and a renewed valuation appeal. The initial upgrade to Hold reflected optimism about stabilising technical trends and robust fundamentals, while the subsequent downgrade to Sell highlighted caution amid mixed technical signals and evolving market dynamics.

Despite short-term volatility, the company’s attractive valuation ratios and solid operational performance position it favourably within its sector. Investors should remain attentive to upcoming quarterly results and technical developments, as these will be critical in shaping the stock’s near-term trajectory. Overall, National Fittings Ltd demonstrated resilience and growth potential, delivering a compelling performance that outpaced broader market benchmarks during the week.

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