TVS Supply Chain Solutions Ltd Falls 5.75%: Downgrade and Technical Shift Weigh on Stock

23 February 2026: Downgrade to Sell Triggers Sharp Decline

On 23 February, TVS Supply Chain Solutions Ltd opened the week at ₹122.36 but closed sharply lower at ₹117.31, down 4.13% on the day. This decline coincided with MarketsMOJO's downgrade of the stock from Hold to Sell, citing a combination of deteriorating technical indicators and weak long-term fundamentals. The downgrade reflected concerns over the company’s financial health, including a modest average Return on Capital Employed (ROCE) of 4.13%, sluggish net sales growth of 6.63% CAGR over five years, and a weak EBIT to interest coverage ratio of 0.89, signalling potential liquidity risks.

The downgrade also highlighted increased promoter share pledging at 31.87%, up 2.64% in the last quarter, which can exert downward pressure on the stock during market stress. Despite some recent profit growth and improved leverage ratios, these positives were insufficient to offset the negative sentiment, resulting in a significant intraday price drop.

24 February 2026: Technical Momentum Shifts Amid Market Volatility

The following day, the stock continued its downward trajectory, closing at ₹115.85, down 1.24%. This movement was accompanied by a notable shift in technical momentum from mildly bullish to sideways, reflecting increased uncertainty among investors. Key technical indicators presented a mixed picture: the weekly MACD remained mildly bullish, but monthly signals were inconclusive; the Relative Strength Index (RSI) was neutral on both weekly and monthly charts; and Bollinger Bands showed a divergence with weekly mildly bullish but monthly mildly bearish trends.

Daily moving averages turned mildly bearish, and the weekly Know Sure Thing (KST) indicator was bearish, reinforcing short-term weakness. Meanwhile, Dow Theory signals remained mildly bullish, and the monthly On-Balance Volume (OBV) was bullish, suggesting some longer-term accumulation despite short-term volatility. The stock traded within a range of ₹116.59 to ₹123.59, well below its 52-week high of ₹147.00 but comfortably above the 52-week low of ₹92.40.

25 to 27 February 2026: Consolidation and Minor Recovery

On 25 February, the stock declined further to ₹113.35, down 2.16%, while the Sensex gained 0.41%. This day marked the lowest close of the week for TVS Supply Chain Solutions Ltd. However, the stock showed signs of stabilisation on 26 February, rising 0.78% to ₹114.23, and continued this modest recovery on 27 February, closing at ₹115.32 with a 0.95% gain. Despite these gains, the stock ended the week down 5.75%, underperforming the Sensex’s 0.96% decline.

Volume steadily decreased throughout the week, from 107,679 shares on 23 February to just 8,626 on 27 February, indicating reduced trading interest amid the technical consolidation phase. The stock’s price action during these days reflected a cautious market awaiting clearer directional signals amid mixed technical and fundamental cues.

Weekly Price Performance: TVS Supply Chain Solutions Ltd vs Sensex

Key Takeaways

Negative Signals: The downgrade to Sell by MarketsMOJO on 23 February was a pivotal event, reflecting deteriorating technical and fundamental conditions. The stock’s weak long-term ROCE of 4.13%, poor interest coverage ratio of 0.89, and increased promoter share pledging at 31.87% raise concerns about financial stability and potential downside risks. The technical momentum shift to sideways with bearish daily moving averages and bearish weekly KST indicator further signals short-term caution.

Positive Signals: Despite the challenges, the stock showed some resilience with a modest recovery in the last two trading sessions, supported by mildly bullish weekly MACD and monthly OBV indicators. Recent profit growth and improved leverage ratios suggest operational improvements that could support medium-term stability. The stock’s valuation, with an enterprise value to capital employed ratio of 2.0, remains attractive relative to peers, though this is tempered by underperformance over the past year.

Market Context: The Sensex’s relatively muted movement this week (+0.39% to -1.16% daily swings) contrasts with the stock’s sharper declines and volatility, highlighting company-specific factors driving price action. The stock’s volume decline over the week indicates reduced trading interest amid uncertainty.

Conclusion

TVS Supply Chain Solutions Ltd’s week was dominated by a significant downgrade and a technical momentum shift that together contributed to a 5.75% weekly decline, underperforming the broader market. The downgrade reflected a comprehensive assessment of weak long-term fundamentals and mixed technical signals, while the technical shift to sideways momentum indicates a consolidation phase amid market volatility. Although recent profit growth and improved leverage provide some optimism, the stock remains under pressure from financial risks and market scepticism. Investors should monitor upcoming price action and technical indicators closely to gauge whether the stock can regain upward momentum or face further downside.

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