Understanding the Current Rating
The Strong Sell rating indicates that Indian Acrylics Ltd is currently viewed as a high-risk investment with limited upside potential. This recommendation is grounded in 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 health and market position, guiding investors on the prudence of holding or divesting the stock.
Quality Assessment
As of 30 January 2026, Indian Acrylics Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, primarily due to its extremely high debt levels. The debt-to-equity ratio stands at an alarming 186.3 times, signalling a precarious capital structure. This excessive leverage raises concerns about the company’s ability to sustain operations and invest in growth initiatives.
Moreover, the company’s net sales have declined at an annualised rate of -5.72% over the past five years, while operating profit has stagnated at 0%. Such flat growth and profitability metrics reflect operational challenges and limited competitive advantage in the petrochemicals sector. The high debt-to-EBITDA ratio of 3.60 times further underscores the company’s strained capacity to service its obligations, increasing financial risk for shareholders.
Valuation Considerations
Currently, Indian Acrylics Ltd is classified as a risky stock from a valuation perspective. The latest data shows that the stock trades at valuations that are unfavourable compared to its historical averages. Despite a 47.6% increase in profits over the past year, the stock has delivered a negative return of -39.48% over the same period, indicating a disconnect between earnings growth and market sentiment.
This disparity suggests that investors remain cautious, possibly due to concerns over the company’s debt burden and operational performance. Additionally, 26.36% of promoter shares are pledged, which can exert downward pressure on the stock price during market downturns, further amplifying valuation risk.
Financial Trend Analysis
The financial trend for Indian Acrylics Ltd is currently flat, reflecting a lack of meaningful improvement in key financial metrics. The company reported flat results in the September 2025 half-year, with operating cash flow at a low of ₹-9.54 crores and cash and cash equivalents at a modest ₹7.25 crores. The debt-to-equity ratio worsened to 450.12 times in the same period, indicating a further deterioration in the balance sheet.
These figures highlight ongoing liquidity challenges and limited financial flexibility. The company’s inability to generate positive operating cash flow raises questions about its capacity to fund operations internally, making it reliant on external financing which may be costly or difficult to secure.
Technical Outlook
From a technical standpoint, Indian Acrylics Ltd is rated bearish. The stock has underperformed key benchmarks such as the BSE500 over the last three years, one year, and three months. Recent price movements show a decline of -1.68% on the latest trading day, with a one-month loss of -6.56% and a six-month drop of -27.00%. Year-to-date, the stock has fallen by -9.60%, reflecting persistent selling pressure.
This bearish technical trend suggests that market participants remain pessimistic about the stock’s near-term prospects, reinforcing the caution advised by the Strong Sell rating.
Stock Returns and Market Performance
As of 30 January 2026, Indian Acrylics Ltd’s stock returns paint a challenging picture for investors. The stock has delivered a negative return of -39.48% over the past year, significantly underperforming broader market indices. Shorter-term returns also reflect weakness, with losses of -18.89% over three months and -27.00% over six months.
This underperformance is compounded by the company’s microcap status and sector-specific headwinds in petrochemicals, which may limit liquidity and investor interest.
Implications for Investors
The Strong Sell rating serves as a clear signal for investors to exercise caution. The combination of weak quality metrics, risky valuation, flat financial trends, and bearish technical indicators suggests that Indian Acrylics Ltd faces significant challenges that could impede capital appreciation and increase downside risk.
Investors should carefully consider these factors in the context of their portfolio objectives and risk tolerance. The current rating implies that holding or accumulating the stock may not be advisable until there is a demonstrable improvement in the company’s fundamentals and market outlook.
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Company Profile and Sector Context
Indian Acrylics Ltd operates within the petrochemicals sector and is classified as a microcap company. The sector is known for its cyclical nature and sensitivity to raw material prices and global demand fluctuations. Given the company’s current financial and operational challenges, it faces an uphill task in regaining investor confidence and achieving sustainable growth.
Its microcap status also implies limited market liquidity, which can exacerbate price volatility and make it more difficult for investors to enter or exit positions without impacting the stock price.
Summary of Key Metrics as of 30 January 2026
To summarise, the key metrics underpinning the Strong Sell rating include:
- Mojo Score: 12.0 (Strong Sell grade)
- Debt-Equity Ratio: 186.3 times (high leverage)
- Debt to EBITDA Ratio: 3.60 times (weak debt servicing ability)
- Operating Cash Flow (Yearly): ₹-9.54 crores (negative cash flow)
- Promoter Share Pledge: 26.36% (heightened risk in falling markets)
- Stock Returns (1 Year): -39.48% (significant underperformance)
These figures collectively highlight the elevated risk profile of Indian Acrylics Ltd and justify the current Strong Sell rating.
Looking Ahead
For investors monitoring Indian Acrylics Ltd, it is crucial to watch for any signs of improvement in debt reduction, operational profitability, and cash flow generation. A turnaround in these areas could warrant a reassessment of the rating. Until then, the prevailing conditions suggest a cautious stance is warranted.
Conclusion
Indian Acrylics Ltd’s Strong Sell rating by MarketsMOJO reflects a comprehensive evaluation of its current financial health and market performance as of 30 January 2026. The company’s weak quality metrics, risky valuation, flat financial trends, and bearish technical outlook collectively signal significant challenges ahead. Investors should carefully weigh these factors when considering their exposure to this stock.
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