Rating Overview and Context
On 08 November 2025, MarketsMOJO adjusted the rating for Associated Alcohols & Breweries Ltd from 'Hold' to 'Sell', reflecting a significant change in the company’s overall assessment. The Mojo Score, a composite indicator of the stock’s quality, valuation, financial health, and technical outlook, declined sharply by 20 points, moving from 51 to 31. This shift signals a more cautious stance towards the stock, advising investors to consider reducing exposure or avoiding new positions.
Here’s How the Stock Looks Today
As of 02 February 2026, the stock’s performance and financial indicators continue to reflect challenges that justify the current 'Sell' rating. The stock has experienced a notable decline over the past year, delivering a negative return of -41.69%, significantly underperforming the broader market benchmark, the BSE500, which has generated a positive return of 5.79% over the same period. This underperformance highlights the stock’s relative weakness within the beverages sector and the wider market.
Quality Assessment
The company’s quality grade is assessed as average. While Associated Alcohols & Breweries Ltd has demonstrated some operational stability, its long-term growth prospects appear limited. Operating profit has grown at an annualised rate of 14.95% over the last five years, which is modest but not robust enough to inspire confidence in sustained expansion. Furthermore, the latest quarterly profit after tax (PAT) stands at ₹14.01 crores, reflecting a sharp decline of 35.9% compared to the previous four-quarter average. This contraction in profitability raises concerns about the company’s ability to maintain earnings momentum.
Valuation Perspective
From a valuation standpoint, the stock is currently rated as very attractive. This suggests that the market price may be undervalued relative to the company’s intrinsic worth or sector peers. However, attractive valuation alone does not compensate for the underlying financial and operational weaknesses. Investors should weigh this factor carefully, recognising that a low price may reflect the market’s anticipation of continued challenges ahead.
Financial Trend and Stability
The financial grade for Associated Alcohols & Breweries Ltd is negative, indicating deteriorating financial health. Net sales for the most recent quarter have fallen by 6.9% to ₹253.84 crores compared to the previous four-quarter average, signalling weakening demand or operational issues. Additionally, the company’s debtors turnover ratio is at a low 20.39 times, which may point to inefficiencies in receivables management or slower collections. These factors combined suggest caution regarding the company’s near-term financial trajectory.
Technical Outlook
The technical grade is bearish, reflecting unfavourable price trends and momentum indicators. The stock’s recent price movements show a downward trajectory, with a one-month decline of 14.27% and a three-month drop of 32.86%. The one-day change on 02 February 2026 was -1.49%, further underscoring the negative market sentiment. Such technical signals often indicate that selling pressure remains dominant, and a recovery may not be imminent.
Market Participation and Investor Interest
Another noteworthy aspect is the absence of domestic mutual fund holdings in the company, which currently stands at 0%. Given that mutual funds typically conduct thorough research and due diligence before investing, their lack of participation may reflect concerns about the company’s valuation, business model, or growth prospects. This absence of institutional support can contribute to lower liquidity and higher volatility in the stock.
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Implications for Investors
The 'Sell' rating on Associated Alcohols & Breweries Ltd advises investors to exercise caution. The combination of average quality, very attractive valuation, negative financial trends, and bearish technicals paints a picture of a company facing multiple headwinds. While the valuation may appear tempting, the underlying fundamentals and market sentiment suggest that risks remain elevated.
Investors holding the stock should consider reassessing their positions in light of the current outlook, especially given the stock’s significant underperformance relative to the broader market. Prospective investors might prefer to wait for clearer signs of financial recovery and technical stabilisation before initiating new exposure.
Summary of Key Metrics as of 02 February 2026
- Mojo Score: 31.0 (Sell Grade)
- 1-Year Return: -41.69%
- Operating Profit Growth (5-year CAGR): 14.95%
- Latest Quarterly PAT: ₹14.01 crores (down 35.9%)
- Net Sales (Latest Quarter): ₹253.84 crores (down 6.9%)
- Debtors Turnover Ratio (Half Year): 20.39 times
- Domestic Mutual Fund Holding: 0%
In conclusion, the current 'Sell' rating reflects a comprehensive evaluation of Associated Alcohols & Breweries Ltd’s present-day financial health, market performance, and valuation. Investors are encouraged to consider these factors carefully when making portfolio decisions.
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