Understanding the Current Rating
The Strong Sell rating assigned to Acme Resources Ltd indicates a cautious stance for investors, signalling that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment potential as of today.
Quality Assessment
As of 10 February 2026, Acme Resources Ltd exhibits below-average quality metrics. The company’s long-term fundamental strength remains weak, with an average Return on Equity (ROE) of just 3.37%. This low ROE suggests that the company is generating limited returns on shareholders’ equity, which is a critical indicator of operational efficiency and profitability. Furthermore, the company’s net sales have declined at an annual rate of -5.35%, while operating profit has contracted by -12.38% over the same period. These figures highlight challenges in sustaining growth and profitability, which weigh heavily on the quality grade.
Valuation Considerations
Despite the subdued financial performance, Acme Resources Ltd is currently trading at an expensive valuation. The Price to Book Value ratio stands at 0.6, which is relatively high given the company’s earnings and growth profile. This premium valuation compared to peers’ historical averages suggests that the market may be pricing in expectations that are not fully supported by the company’s fundamentals. Investors should be cautious, as paying a premium for a stock with deteriorating financials can increase downside risk.
Financial Trend Analysis
The financial trend for Acme Resources Ltd is largely flat, reflecting stagnation rather than growth. The company’s Profit Before Tax (PBT) excluding other income for the quarter ending September 2025 was ₹0.69 crore, representing a sharp decline of -68.49%. This significant drop in profitability signals operational difficulties and a lack of momentum in earnings generation. Additionally, over the past year, the stock has delivered a negative return of -23.43%, while profits have fallen by -15%. These trends underscore the challenges the company faces in reversing its financial trajectory.
Technical Outlook
From a technical perspective, the stock is currently bearish. Price movements over recent months have been negative, with a 1-month decline of -12.35% and a 3-month drop of -21.91%. The 6-month and year-to-date returns also reflect downward pressure, at -17.95% and -17.42% respectively. This bearish technical grade suggests that market sentiment remains weak, and the stock may continue to face selling pressure in the near term.
Stock Performance Snapshot
As of 10 February 2026, Acme Resources Ltd’s stock price has remained largely stagnant in the short term, with a 1-day change of 0.00% and a 1-week gain of just 0.03%. However, the longer-term performance paints a more concerning picture, with consistent declines across multiple time frames. This performance aligns with the company’s fundamental and technical challenges, reinforcing the rationale behind the Strong Sell rating.
What This Rating Means for Investors
For investors, the Strong Sell rating serves as a cautionary signal. It suggests that the stock is expected to underperform and that there are significant risks associated with holding or acquiring shares at current levels. The combination of weak quality metrics, expensive valuation, flat financial trends, and bearish technical indicators implies that the company faces considerable headwinds. Investors should carefully evaluate their exposure to Acme Resources Ltd and consider alternative opportunities with stronger fundamentals and more favourable market dynamics.
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Sector and Market Context
Acme Resources Ltd operates within the Non Banking Financial Company (NBFC) sector, a space that has seen varied performance across different players. While some NBFCs have demonstrated resilience and growth, Acme Resources Ltd’s microcap status and weak financial metrics place it at a disadvantage relative to larger, more stable competitors. The sector’s overall health and regulatory environment also influence investor sentiment, but the company’s individual challenges remain the primary driver of its current rating.
Summary of Key Metrics as of 10 February 2026
The latest data shows the following key metrics for Acme Resources Ltd:
- Mojo Score: 17.0 (Strong Sell grade)
- Return on Equity (ROE): 3.37%
- Net Sales Growth (annual): -5.35%
- Operating Profit Growth (annual): -12.38%
- Profit Before Tax (PBT) excluding other income (Sep 2025 quarter): ₹0.69 crore, down -68.49%
- Price to Book Value: 0.6 (expensive relative to peers)
- Stock Returns: 1Y -23.43%, 6M -17.95%, 3M -21.91%, 1M -12.35%
Investor Takeaway
Investors should interpret the Strong Sell rating as a signal to exercise caution. The company’s current financial and market indicators suggest limited upside potential and heightened risk. Those holding the stock may consider reassessing their positions, while prospective investors might seek more robust opportunities within the NBFC sector or broader market. Continuous monitoring of the company’s quarterly results and market developments will be essential to identify any potential turnaround or improvement in fundamentals.
Looking Ahead
While the present outlook for Acme Resources Ltd is challenging, market conditions and company strategies can evolve. Investors should watch for any signs of operational improvement, cost control measures, or strategic initiatives that could enhance profitability and growth. Until such developments materialise, the Strong Sell rating remains a prudent guide for managing risk exposure.
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