Allied Blenders & Distillers Ltd Upgraded to Hold by MarketsMOJO on Strong Financial and Valuation Metrics

Quality Assessment: Enhanced Operational Efficiency and Consistent Profitability

The upgrade to a Hold rating is underpinned by Allied Blenders’ demonstrable operational strength. The company boasts a high Return on Capital Employed (ROCE) of 17.47%, signalling efficient utilisation of capital to generate profits. This figure is notably above the industry average, highlighting management’s effectiveness in deploying resources.

Moreover, Allied Blenders has reported positive results for six consecutive quarters, underscoring a sustained profitability trend. The 9-month Profit After Tax (PAT) stands at ₹199.51 crores, reflecting a strong bottom-line performance. This consistency in earnings growth enhances the company’s quality grade, moving it away from previous concerns that contributed to the Sell rating.

Valuation Metrics: Attractive Pricing Relative to Capital Employed

Valuation improvements have also played a pivotal role in the rating change. Allied Blenders currently trades at an Enterprise Value to Capital Employed (EV/CE) ratio of 5.5, which is considered attractive within the beverages sector. This valuation multiple suggests that the stock is reasonably priced relative to the capital it employs, offering investors a balanced risk-reward profile.

Additionally, the company’s market capitalisation grade remains modest at 3, indicating a small-cap status that may appeal to investors seeking growth opportunities in less crowded segments. The stock’s 1.33% day change and a one-year return of 20.66% significantly outperform the broader BSE500 index’s 8.76% return, reinforcing the valuation appeal.

Financial Trend: Robust Growth and Record Sales

Financially, Allied Blenders has demonstrated a compelling upward trajectory. Operating profit has grown at an annualised rate of 38.70%, a remarkable pace that signals strong operational leverage and market demand. The company’s quarterly net sales reached a record ₹990.06 crores, the highest to date, reflecting expanding market share and effective distribution strategies.

Profit growth has been even more pronounced, with profits rising by an extraordinary 2224% over the past year. This surge is indicative of margin expansion and cost control, alongside revenue growth. Such a financial trend justifies the upgrade from Sell to Hold, as it reflects a turnaround from previous periods of underperformance.

Promoters continue to hold a majority stake, providing stability and confidence in the company’s strategic direction. This shareholder structure supports long-term value creation and aligns management incentives with investor interests.

Technical Analysis: Market-Beating Returns and Positive Momentum

From a technical perspective, Allied Blenders’ stock has exhibited strong momentum. The 20.66% return over the last twelve months significantly outpaces the broader market benchmark, the BSE500, which returned 8.76% over the same period. This outperformance reflects positive investor sentiment and growing confidence in the company’s prospects.

The recent 1.33% gain in a single trading day further indicates short-term bullishness, supported by improving fundamentals. The Mojo Score of 54.0 and a Mojo Grade upgrade from Sell to Hold on 27 January 2026 encapsulate this positive shift in technical and fundamental outlooks.

Contextualising the Upgrade: Sector and Market Implications

Within the beverages sector, Allied Blenders’ upgrade to Hold reflects a broader trend of recovery and growth among select players. The company’s ability to sustain high operating profit growth and maintain an attractive valuation multiple positions it well against peers. While the Mojo Grade remains at Hold, the improvement from Sell signals a cautious optimism among analysts and investors alike.

Investors should note that despite the positive momentum, the company’s market cap grade of 3 indicates it remains a relatively small player, which may entail higher volatility. However, the strong promoter holding and consistent financial performance mitigate some of these risks.

Looking ahead, Allied Blenders’ continued focus on operational efficiency, margin expansion, and market penetration will be critical to sustaining this upgraded rating. Monitoring quarterly results and sector dynamics will be essential for investors considering exposure to this stock.

Summary of Ratings and Scores

As of 27 January 2026, Allied Blenders & Distillers Ltd holds a Mojo Score of 54.0 and a Mojo Grade of Hold, upgraded from Sell. The market cap grade remains at 3, reflecting its small-cap status. Key financial metrics include a ROCE of 17.47%, operating profit growth of 38.70% annually, and a PAT of ₹199.51 crores for the first nine months of FY25-26. The stock’s one-year return of 20.66% outperforms the BSE500 benchmark by a wide margin.

Overall, the upgrade reflects a comprehensive improvement across quality, valuation, financial trends, and technical indicators, signalling a more balanced risk-reward profile for investors.

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