Indian Acrylics Ltd is Rated Strong Sell

Current Rating and Its Significance

MarketsMOJO’s Strong Sell rating for Indian Acrylics Ltd indicates a cautious stance for investors, signalling significant risks associated with the stock. This rating suggests that the company currently exhibits weak financial health, unfavourable valuation, and negative technical indicators, which collectively advise investors to avoid or divest from the stock. The Strong Sell grade is the lowest in the rating spectrum, reflecting concerns about the company’s ability to generate sustainable returns in the near to medium term.

Quality Assessment: Below Average Fundamentals

As of 10 February 2026, Indian Acrylics Ltd’s quality grade remains below average. The company’s long-term fundamental strength is undermined by a very high debt burden, with a debt-to-equity ratio standing at an alarming 186.3 times. This level of leverage severely restricts financial flexibility and increases vulnerability to market fluctuations. Furthermore, net sales have declined at an annualised rate of -5.72% over the past five years, while operating profit has stagnated, showing no growth. These trends highlight structural challenges in the company’s core operations and raise questions about its ability to generate consistent earnings growth.

Valuation: Risky and Unattractive

The valuation grade for Indian Acrylics Ltd is classified as risky. Despite a 47.6% increase in profits over the past year, the stock has delivered a negative return of -30.29% during the same period, indicating a disconnect between earnings performance and market sentiment. The stock trades at valuations that are considered unfavourable relative to its historical averages, reflecting investor concerns about sustainability and risk. Additionally, 26.36% of promoter shares are pledged, which can exert downward pressure on the stock price in volatile markets, further compounding valuation risks.

Financial Trend: Flat and Concerning

Financially, Indian Acrylics Ltd shows a flat trend. The latest half-year results ending September 2025 reveal operating cash flow at a low of ₹-9.54 crores and cash and cash equivalents at a modest ₹7.25 crores. The debt-equity ratio has worsened to 450.12 times in the same period, signalling a sharp increase in leverage. The company’s ability to service its debt is limited, with a debt-to-EBITDA ratio of 3.60 times, which is considered high for a microcap in the petrochemicals sector. These factors collectively indicate financial strain and limited growth prospects.

Technicals: Bearish Momentum

From a technical perspective, the stock is currently bearish. Recent price movements show a 1-day decline of -0.81%, with a 3-month return of -13.60% and a 6-month return of -23.56%. Year-to-date, the stock has fallen by -5.57%, and over the last year, it has underperformed the broader BSE500 index significantly. This downward momentum reflects weak investor confidence and a lack of positive catalysts in the near term.

Stock Returns and Market Performance

As of 10 February 2026, Indian Acrylics Ltd has delivered disappointing returns across multiple time frames. The stock’s 1-year return stands at -30.29%, while its 3-month and 6-month returns are -13.60% and -23.56%, respectively. These figures highlight sustained underperformance relative to market benchmarks and peers within the petrochemicals sector. The company’s microcap status further adds to liquidity concerns, making it less attractive for risk-averse investors.

Investor Considerations

Investors should note that the Strong Sell rating reflects a comprehensive evaluation of Indian Acrylics Ltd’s current financial health, valuation, and market dynamics. The high leverage, flat financial trends, risky valuation, and bearish technical signals collectively suggest that the stock carries elevated risk. For those holding the stock, it may be prudent to reassess exposure and consider alternatives with stronger fundamentals and growth prospects. Prospective investors should approach with caution and conduct thorough due diligence before committing capital.

Sector and Market Context

Indian Acrylics Ltd operates within the petrochemicals sector, a space characterised by cyclical demand and sensitivity to global commodity prices. The company’s microcap status places it at a disadvantage compared to larger, more diversified peers with stronger balance sheets and better access to capital. The sector has seen mixed performance recently, with some companies benefiting from rising petrochemical prices and others struggling with input cost pressures. Indian Acrylics Ltd’s current financial and technical profile suggests it is not positioned to capitalise on sector tailwinds at this time.

Summary of Key Metrics as of 10 February 2026

To summarise, the key metrics underpinning the Strong Sell rating include:

• Debt-Equity Ratio: 186.3 times (high leverage)
• Debt to EBITDA Ratio: 3.60 times (limited debt servicing ability)
• Net Sales Growth (5 years): -5.72% annualised decline
• Operating Profit Growth (5 years): 0% (flat)
• Operating Cash Flow (latest year): ₹-9.54 crores
• Cash and Cash Equivalents (latest half-year): ₹7.25 crores
• Promoter Shares Pledged: 26.36%
• Stock Returns (1 year): -30.29%

These figures collectively highlight the challenges facing Indian Acrylics Ltd and justify the cautious investment stance.

Conclusion

Indian Acrylics Ltd’s Strong Sell rating by MarketsMOJO reflects a comprehensive assessment of its current financial and market position as of 10 February 2026. The company’s high leverage, flat financial trends, risky valuation, and bearish technical outlook present significant headwinds for investors. While the petrochemicals sector offers opportunities, Indian Acrylics Ltd’s microcap status and weak fundamentals suggest that investors should exercise caution. This rating serves as a clear signal to prioritise capital preservation and consider more robust investment alternatives within the sector or broader market.

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