Solid Stone Company Ltd Valuation Shifts to Attractive Amid Mixed Market Returns

Valuation Metrics: A Closer Look

As of the latest assessment, Solid Stone Company Ltd’s price-to-earnings (P/E) ratio stands at 24.88, a figure that positions the stock as attractively valued relative to its historical range and peer group. This marks a shift from its previous valuation grade of very attractive, reflecting a modest increase in the P/E ratio but still below the levels seen in several industry peers. For context, Asian Granito trades at a P/E of 55.1, Orient Bell at 64.04, and Exxaro Tiles at 52.29, all significantly higher and classified as very attractive or expensive depending on their earnings outlook.

The price-to-book value (P/BV) ratio for Solid Stone is currently 0.71, indicating the stock is trading below its book value, a traditional marker of undervaluation. This metric supports the attractive valuation grade, suggesting that the market price does not fully reflect the company’s net asset value. In comparison, peers such as Murudesh Ceramic have a P/E of 20.73 and a PEG ratio of 0.71, while Asi Industries trades at a lower P/E of 10.01 but shares a similar attractive valuation status.

Other valuation multiples such as EV to EBIT (12.08) and EV to EBITDA (8.80) further reinforce the company’s reasonable pricing relative to earnings before interest, taxes, depreciation, and amortisation. The EV to Capital Employed ratio of 0.84 and EV to Sales of 1.26 also suggest that the enterprise value is not excessively high compared to its capital base and revenue generation capacity.

Financial Performance and Quality Indicators

Despite the improved valuation, Solid Stone’s return on capital employed (ROCE) and return on equity (ROE) remain modest at 6.98% and 2.85% respectively. These figures indicate limited profitability and efficiency in generating returns from shareholders’ equity and capital investments. The company’s PEG ratio is reported as 0.00, which may reflect either a lack of earnings growth or data unavailability, signalling caution for growth-oriented investors.

Dividend yield data is not available, which may be a factor for income-focused investors seeking regular returns. The company’s market capitalisation grade is rated 4, suggesting a mid-tier market cap status within its sector, which can influence liquidity and analyst coverage.

Stock Price Movement and Market Comparison

Solid Stone’s current share price is ₹29.60, up 2.92% on the day, with a 52-week high of ₹41.29 and a low of ₹26.71. The stock’s recent trading range shows volatility, with today’s intraday high at ₹31.98 and low at ₹27.64. This price action reflects investor uncertainty amid mixed financial signals.

When compared to the Sensex benchmark, Solid Stone’s returns have underperformed significantly over longer periods. The stock has declined 14.45% over the past year against an 8.65% gain in the Sensex. Over three years, the stock is down 28.07% while the Sensex has surged 41.84%. The five-year and ten-year returns show even starker contrasts, with the stock falling 53.75% and 31.16% respectively, compared to Sensex gains of 76.66% and 241.87% over the same periods.

Peer Comparison and Relative Valuation

Within the miscellaneous sector, Solid Stone’s valuation metrics place it in an attractive category, but it faces stiff competition from peers with varying risk and valuation profiles. Asian Granito and Exxaro Tiles, both rated very attractive, trade at substantially higher P/E multiples, reflecting market expectations of stronger earnings growth or superior business models. Conversely, companies such as Global Surfaces and Regency Ceramics are classified as risky, with loss-making operations or volatile earnings, which may justify their divergent valuation levels.

Solid Stone’s EV to EBITDA multiple of 8.80 is lower than Asian Granito’s 20.06 and Orient Bell’s 13.92, indicating a more conservative valuation relative to earnings before depreciation and amortisation. This could appeal to value investors seeking stocks with reasonable enterprise value multiples amid sector volatility.

Rating Changes and Market Sentiment

MarketsMOJO recently downgraded Solid Stone Company Ltd’s Mojo Grade from Sell to Strong Sell on 13 Nov 2025, reflecting concerns about the company’s financial health and growth prospects despite the improved valuation grade. The Mojo Score stands at 23.0, signalling weak overall fundamentals and caution for investors. This downgrade underscores the importance of considering both valuation and quality metrics when evaluating the stock’s attractiveness.

Investors should weigh the improved valuation against the company’s subdued profitability and underwhelming long-term returns relative to the broader market. The stock’s recent price appreciation of 2.92% and weekly gain of 2.07% contrast with its negative monthly and yearly returns, suggesting short-term momentum but persistent longer-term challenges.

Investment Implications and Outlook

For investors considering Solid Stone Company Ltd, the shift from very attractive to attractive valuation signals a modest re-rating that may offer some near-term price support. However, the company’s low returns on equity and capital employed, combined with its underperformance relative to the Sensex over multiple time horizons, suggest caution.

Value investors may find appeal in the sub-1.0 price-to-book ratio and reasonable EV multiples, but growth-oriented investors might be deterred by the zero PEG ratio and lack of dividend yield. The recent downgrade to a Strong Sell rating by MarketsMOJO further emphasises the need for thorough due diligence and consideration of alternative investments within the sector.

Ultimately, Solid Stone’s valuation improvement is a positive development, but it must be balanced against fundamental weaknesses and competitive pressures. Investors should monitor upcoming earnings releases and sector trends closely to reassess the stock’s attractiveness in a dynamic market environment.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →