Understanding the Current Rating
The Strong Sell rating assigned to Indian Acrylics Ltd indicates a cautious stance for investors, signalling significant concerns about the company’s financial health, valuation, and market performance. While the rating was revised on 30 April 2024, it remains relevant today given the company’s ongoing challenges. Investors should interpret this rating as a recommendation to avoid or exit the stock due to its elevated risk profile and weak fundamentals.
Here’s How Indian Acrylics Ltd Looks Today
As of 19 January 2026, Indian Acrylics Ltd continues to face considerable headwinds across multiple parameters that influence its rating. The company operates within the petrochemicals sector but is classified as a microcap, which often entails higher volatility and liquidity risks.
Quality Assessment
The company’s quality grade is assessed as below average. This reflects weak long-term fundamental strength, primarily driven by its high leverage and stagnant growth. The debt-equity ratio stands alarmingly high at 186.3 times, indicating a heavy reliance on borrowed funds. Such a level of indebtedness raises concerns about the company’s ability to sustain operations without financial distress.
Moreover, Indian Acrylics Ltd has experienced negative growth in net sales, with an annualised decline of 5.72% over the past five years. Operating profit growth has been flat, signalling limited operational efficiency improvements or expansion. These factors collectively contribute to the company’s poor quality grading.
Valuation Considerations
The valuation grade for Indian Acrylics Ltd is categorised as risky. The stock trades at valuations that are unfavourable compared to its historical averages, reflecting market scepticism about its future prospects. Despite a 47.6% increase in profits over the past year, the stock price has declined sharply, delivering a negative return of 41.29% over the same period. This divergence suggests that investors remain wary of the company’s sustainability and growth outlook.
Financial Trend Analysis
The financial grade is considered flat, indicating a lack of meaningful improvement or deterioration in key financial metrics. The company’s operating cash flow for the year ended September 2025 was negative at ₹9.54 crores, highlighting cash generation challenges. Additionally, the debt-equity ratio surged to 450.12 times in the half-year period, further exacerbating financial risk.
Cash and cash equivalents are at a low ₹7.25 crores, limiting the company’s liquidity buffer. The high debt to EBITDA ratio of 3.60 times underscores the difficulty in servicing debt obligations, which could constrain future investment and operational flexibility.
Technical Outlook
From a technical perspective, the stock is graded as bearish. Price performance over various time frames reflects consistent underperformance. The stock has declined 0.33% in the last trading day, gained 4.53% over the past week, but lost 11.24% in the last month and 15.97% over three months. The six-month and one-year returns are deeply negative at -25.65% and -41.29%, respectively.
This persistent downtrend, coupled with high promoter share pledging (26.36%), adds downward pressure on the stock price. High pledged shares often signal potential forced selling in falling markets, increasing volatility and risk for shareholders.
Performance Relative to Benchmarks
Indian Acrylics Ltd has consistently underperformed the BSE500 benchmark over the last three years. This underperformance, combined with weak fundamentals and technical indicators, reinforces the rationale behind the Strong Sell rating. Investors seeking stable returns may find better opportunities elsewhere in the petrochemicals sector or broader market.
Only 1% make it here. This Large Cap from the Gems, Jewellery And Watches sector passed our rigorous filters with flying colors. Be among the first few to spot this gem!
- - Highest rated stock selection
- - Multi-parameter screening cleared
- - Large Cap quality pick
Implications for Investors
The Strong Sell rating on Indian Acrylics Ltd serves as a clear warning signal. Investors should be cautious about holding or initiating positions in this stock given its weak financial health, risky valuation, and negative technical momentum. The company’s high debt levels and poor cash flow generation increase the risk of financial distress, which could lead to further share price declines.
For those currently invested, it may be prudent to reassess exposure and consider risk mitigation strategies. Prospective investors should seek alternative opportunities with stronger fundamentals and more favourable market dynamics.
Summary
In summary, Indian Acrylics Ltd’s current Strong Sell rating by MarketsMOJO reflects a comprehensive evaluation of its quality, valuation, financial trend, and technical outlook as of 19 January 2026. Despite some profit growth, the company’s high leverage, poor cash flow, and sustained share price weakness justify a cautious stance. This rating aims to guide investors towards informed decisions in a challenging market environment.
Company Profile Snapshot
Indian Acrylics Ltd is a microcap company operating in the petrochemicals sector. Its market capitalisation remains modest, and the company faces significant challenges in scaling operations and improving profitability. The combination of high debt and subdued growth prospects continues to weigh on investor sentiment.
Stock Returns Overview
As of 19 January 2026, the stock’s returns are as follows: a 1-day decline of 0.33%, a 1-week gain of 4.53%, but losses of 11.24% over 1 month, 15.97% over 3 months, 25.65% over 6 months, 7.12% year-to-date, and a steep 41.29% over the past year. These figures highlight the stock’s volatility and downward trajectory in recent periods.
Debt and Liquidity Concerns
The company’s debt-equity ratio remains extraordinarily high, reaching 450.12 times in the half-year period, signalling extreme leverage. Coupled with low cash reserves of ₹7.25 crores, this raises concerns about liquidity and the ability to meet short-term obligations. The debt to EBITDA ratio of 3.60 times further emphasises the strain on operational cash flows.
Promoter Shareholding Risks
With 26.36% of promoter shares pledged, there is an added risk of forced selling in adverse market conditions. This factor can exacerbate price declines and increase volatility, making the stock less attractive for risk-averse investors.
Conclusion
Indian Acrylics Ltd’s Strong Sell rating is a reflection of its current financial and market realities. Investors should carefully consider these factors before making investment decisions, recognising the elevated risks and limited upside potential at this juncture.
Unlock special upgrade rates for a limited period. Start Saving Now →
