T T Ltd Valuation Shifts to Attractive Amidst Challenging Market Returns

Valuation Metrics and Recent Changes

T T Ltd’s price-to-earnings (P/E) ratio currently stands at a strikingly negative -43.05, a figure that signals significant losses and earnings volatility. Despite this, the valuation grade has improved from "very attractive" to "attractive," indicating that the market is beginning to price in potential recovery or value realisation. The price-to-book value (P/BV) ratio is 1.54, suggesting the stock is trading modestly above its book value, a shift from previous levels that were considered more compelling.

Enterprise value multiples remain elevated, with EV to EBIT at 36.57 and EV to EBITDA at 30.15, both considerably higher than typical sector averages. These elevated multiples reflect the market’s cautious stance on earnings quality and operational efficiency. The EV to capital employed and EV to sales ratios are relatively low at 1.34 and 1.35 respectively, indicating that the company’s asset base and sales are not being fully reflected in its enterprise valuation.

Return metrics remain weak, with the latest return on capital employed (ROCE) at 3.57% and return on equity (ROE) negative at -3.58%. These figures underscore ongoing profitability challenges and capital inefficiencies that weigh heavily on investor sentiment.

Peer Comparison Highlights Valuation Disparities

When compared with peers in the Garments & Apparels sector, T T Ltd’s valuation stands out for its relative attractiveness. Major competitors such as Sumeet Industries, R&B Denims, SBC Exports, and Pashupati Cotspin are all rated as "very expensive" with P/E ratios ranging from 43.1 to 94.32 and EV to EBITDA multiples often exceeding 30. For instance, Sumeet Industries trades at a P/E of 76.83 and EV to EBITDA of 36.54, while Pashupati Cotspin’s P/E is 89.32 with an EV to EBITDA of 50.86.

In contrast, T T Ltd’s P/E ratio, albeit negative, and EV to EBITDA multiple of 30.15 place it in a comparatively more attractive valuation bracket. Other companies like Sportking India and Faze Three also share an "attractive" valuation status but with significantly lower P/E ratios of 10.1 and 26.18 respectively, and EV to EBITDA multiples well below T T Ltd’s levels.

Interestingly, Indo Rama Synth. is rated "very attractive" with a P/E of 7.38 and EV to EBITDA of 7.23, highlighting a stark valuation gap within the sector. This disparity suggests that while T T Ltd is improving in valuation terms, it still faces a considerable premium relative to the most attractively priced peers.

Market Performance and Investor Returns

Despite the improved valuation grade, T T Ltd’s stock performance has been lacklustre relative to the broader market. The stock price closed at ₹7.50 on 2 Feb 2026, up 3.73% on the day, with a 52-week high of ₹17.00 and a low of ₹6.70. This recent uptick contrasts with longer-term underperformance.

Examining returns over various periods reveals a challenging investment journey. Over the past week, the stock gained 3.02%, outperforming the Sensex which declined by 1.00%. However, over one month and year-to-date periods, T T Ltd has declined by 11.45% and 8.54% respectively, both underperforming the Sensex’s losses of 4.67% and 5.28%.

More concerning is the one-year return of -45.57%, starkly contrasting with the Sensex’s positive 5.16% gain. Even over three and ten years, the stock’s returns of -4.58% and 50.75% lag significantly behind the Sensex’s 35.67% and 224.57% respectively. The five-year return of 53.37% is also below the Sensex’s 74.40%, highlighting persistent underperformance.

Mojo Score and Analyst Ratings

MarketsMOJO currently assigns T T Ltd a Mojo Score of 23.0, reflecting a "Strong Sell" rating, an upgrade in severity from the previous "Sell" grade as of 1 Aug 2025. This downgrade in sentiment is driven by weak profitability metrics, negative returns, and valuation concerns despite the recent shift from very attractive to attractive valuation grades.

The company’s market cap grade is 4, indicating a micro-cap status with limited liquidity and higher risk. The combination of a low Mojo Score and negative returns suggests that investors should exercise caution and consider the risks of holding the stock in their portfolios.

Sector Outlook and Valuation Context

The Garments & Apparels sector has seen mixed fortunes, with many companies trading at elevated valuations despite operational headwinds. T T Ltd’s relative valuation attractiveness may appeal to value-oriented investors seeking turnaround opportunities, but the negative earnings and weak returns pose significant challenges.

Investors should weigh the company’s improving valuation grade against its operational performance and sector peers. The negative P/E ratio and subdued ROCE and ROE metrics highlight the need for cautious optimism. The stock’s elevated EV to EBIT and EBITDA multiples relative to some peers also suggest that the market is pricing in expectations of future improvement, which remains uncertain.

Investment Implications and Conclusion

In summary, T T Ltd’s shift in valuation grade from very attractive to attractive reflects a subtle recalibration of market expectations rather than a fundamental turnaround. The company’s negative earnings, weak returns, and elevated enterprise multiples caution investors against premature optimism.

While the stock’s relative valuation compared to expensive peers may offer some appeal, the persistent underperformance against the Sensex and the strong sell rating from MarketsMOJO underscore the risks involved. Investors should carefully consider these factors and monitor operational improvements before committing capital.

For those seeking exposure to the Garments & Apparels sector, exploring alternatives with stronger fundamentals and more favourable valuation metrics may be prudent. T T Ltd’s current profile suggests it remains a speculative holding rather than a core portfolio candidate.

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