Current Rating and Its Significance
MarketsMOJO’s Sell rating for Allcargo Terminals Ltd indicates a cautious stance towards the stock, suggesting that investors should consider limiting exposure or potentially exiting positions. This rating reflects a combination of factors including the company’s quality, valuation, financial trend, and technical indicators. While the rating was adjusted on 11 February 2026, the present analysis is based on the latest available data as of 13 February 2026, ensuring that investors receive a current and comprehensive assessment.
Quality Assessment: Below Average Fundamentals
As of 13 February 2026, Allcargo Terminals Ltd’s quality grade remains below average. The company has demonstrated weak long-term fundamental strength, with net sales growing at a modest annual rate of 4.25% over the past five years. Operating profit has shown a somewhat better growth rate of 17.13% annually, but this has not translated into robust overall financial health. The company’s high debt levels further weigh on its quality profile, with an average debt-to-equity ratio of 1.54 times, indicating significant leverage that could constrain future growth and increase financial risk.
Valuation: Very Attractive but Requires Caution
Despite the challenges in quality, the valuation grade for Allcargo Terminals Ltd is currently very attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings and asset base. For value-oriented investors, this could present an opportunity to acquire shares at a discount. However, the attractive valuation must be balanced against the company’s financial and operational risks, as well as its recent performance trends.
Financial Trend: Flat Performance with Rising Debt Concerns
The financial trend for Allcargo Terminals Ltd is flat, indicating limited improvement or deterioration in recent quarters. The latest results for December 2025 show flat operational performance, with interest expenses for the nine months ending December 2025 rising sharply by 58.73% to ₹41.89 crores. Return on capital employed (ROCE) for the half-year stands at a low 10.83%, reflecting subdued profitability relative to the capital invested. Additionally, the debt-to-equity ratio has increased to 2.09 times in the half-year period, signalling growing leverage and potential strain on the company’s balance sheet.
Technical Outlook: Mildly Bearish Sentiment
From a technical perspective, the stock is graded as mildly bearish. Recent price movements show a 1-day decline of 2.44%, with a 1-month drop of 3.97% and a more pronounced 3-month decline of 30.75%. Year-to-date, the stock has fallen by 8.93%, and over the past year, it has delivered a negative return of 10.30%. This underperformance relative to broader market indices such as the BSE500, which the stock has lagged over one, three, and even shorter-term periods, reflects subdued investor sentiment and technical weakness.
Stock Returns and Market Performance
As of 13 February 2026, Allcargo Terminals Ltd’s stock returns highlight a challenging environment for shareholders. The stock has delivered a negative 10.30% return over the last year, underperforming the broader market benchmarks. Shorter-term returns also reflect volatility and weakness, with a 3-month decline of 30.75% and a 6-month drop of 11.05%. While the 1-week return shows a modest recovery of 3.68%, this is insufficient to offset the broader downtrend. These returns underscore the cautious stance reflected in the Sell rating.
Implications for Investors
For investors, the Sell rating on Allcargo Terminals Ltd signals the need for prudence. The company’s below-average quality, rising debt levels, and flat financial trends suggest limited near-term upside. Although the valuation appears very attractive, this alone does not compensate for the operational and financial risks currently facing the company. The mildly bearish technical outlook further supports a cautious approach, indicating that the stock may continue to face downward pressure in the near term.
Summary
In summary, Allcargo Terminals Ltd’s current Sell rating by MarketsMOJO, updated on 11 February 2026, reflects a comprehensive evaluation of the company’s fundamentals, valuation, financial trends, and technical indicators as of 13 February 2026. Investors should weigh the attractive valuation against the company’s high leverage, flat financial performance, and recent negative returns before making investment decisions. This rating serves as a guide to manage risk and align portfolios with prevailing market conditions.
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Company Profile and Market Context
Allcargo Terminals Ltd operates within the transport infrastructure sector and is classified as a microcap company. The sector itself is subject to cyclical trends influenced by economic activity, trade volumes, and infrastructure development. The company’s high debt levels and flat financial trends may reflect broader sector challenges or company-specific operational issues. Investors should consider these sector dynamics alongside company-specific data when evaluating the stock.
Debt and Interest Expense Trends
The company’s rising interest expenses, which increased by nearly 59% over the nine months ending December 2025, highlight the cost of servicing its debt. This increase in financial burden can limit cash flow available for growth initiatives or shareholder returns. The debt-to-equity ratio rising to 2.09 times in the half-year period further emphasises the company’s leveraged position, which may increase vulnerability to interest rate fluctuations or economic downturns.
Profitability Metrics
Return on capital employed (ROCE) is a key measure of profitability and capital efficiency. At 10.83% for the half-year, Allcargo Terminals Ltd’s ROCE is relatively low, indicating that the company is generating modest returns on the capital invested. This level of profitability may not be sufficient to attract growth-focused investors or justify higher valuations, reinforcing the cautious Sell rating.
Investor Takeaway
Investors should interpret the Sell rating as a signal to carefully evaluate the risks associated with Allcargo Terminals Ltd. While the stock’s valuation appears attractive, the combination of below-average quality, flat financial trends, high leverage, and technical weakness suggests limited upside potential in the near term. Portfolio managers and individual investors may consider reducing exposure or monitoring the stock closely for signs of fundamental improvement before increasing positions.
Conclusion
Allcargo Terminals Ltd’s current Sell rating by MarketsMOJO, reflecting data as of 13 February 2026, provides a comprehensive view of the company’s challenges and opportunities. The rating serves as a prudent guide for investors seeking to balance valuation opportunities against operational and financial risks in the transport infrastructure sector.
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