Understanding the Current Rating
The Strong Sell rating assigned to Indian Acrylics Ltd indicates a cautious stance for investors, suggesting that the stock currently exhibits significant risks and challenges. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the stock’s investment potential and risk profile.
Quality Assessment
As of 21 February 2026, Indian Acrylics Ltd’s quality grade is categorised as below average. The company’s long-term fundamental strength is weak, primarily due to its high debt levels and poor growth trajectory. The debt-to-equity ratio stands alarmingly high at 186.3 times, signalling a heavy reliance on borrowed funds. This excessive leverage raises concerns about the company’s ability to sustain operations and meet financial obligations without strain.
Moreover, the company’s net sales have declined at an annual rate of -7.48% over the past five years, while operating profit has grown modestly at 11.89%. This combination of shrinking top-line revenue and limited profit growth highlights structural challenges in the business model and market positioning.
Valuation Considerations
Indian Acrylics Ltd is currently rated as risky on valuation grounds. The stock trades at valuations that are unfavourable compared to its historical averages, reflecting investor apprehension. Despite a 51.1% increase in profits over the past year, the stock has delivered a negative return of -24.60% during the same period, underscoring a disconnect between earnings performance and market sentiment.
Additionally, 26.36% of promoter shares are pledged, which can exert downward pressure on the stock price, especially in volatile or falling markets. This factor adds to the valuation risk, as forced selling of pledged shares could exacerbate price declines.
Financial Trend Analysis
The financial trend for Indian Acrylics Ltd is currently flat, indicating stagnation rather than growth or deterioration. Recent half-year data reveals concerning signs: interest expenses have risen by 34.31% to ₹9.16 crores, while the debt-to-equity ratio has surged to a peak of 450.12 times. Cash and cash equivalents have dwindled to a low ₹7.25 crores, limiting the company’s liquidity cushion.
These metrics suggest that the company is under financial stress, with limited capacity to invest in growth or weather adverse market conditions. The high debt servicing burden and low cash reserves are key factors weighing on the stock’s outlook.
Technical Outlook
From a technical perspective, Indian Acrylics Ltd is rated bearish. The stock’s price performance over various time frames reflects this negative trend. As of 21 February 2026, the stock has declined by 1.78% in the last day and 2.25% over the past week. While it showed a modest 4.48% gain in the last month, the three-month and six-month returns are deeply negative at -15.34% and -24.50%, respectively.
Year-to-date, the stock has fallen by 6.04%, and over the last year, it has lost 24.60% of its value. This underperformance extends to longer horizons as well, with the stock lagging behind the BSE500 index over the past three years, one year, and three months. The technical indicators thus reinforce the cautionary stance reflected in the current rating.
Implications for Investors
The Strong Sell rating signals that Indian Acrylics Ltd currently faces significant headwinds that may impact shareholder value negatively. Investors should be aware of the company’s high leverage, weak growth prospects, and challenging market conditions. The combination of financial strain, risky valuation, and bearish technical signals suggests that the stock may continue to face downward pressure in the near term.
For those considering investment, this rating advises prudence and thorough due diligence. It may be more suitable for risk-averse investors to avoid exposure until there are clear signs of financial improvement and stabilisation in the stock’s price trend.
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Company Profile and Market Context
Indian Acrylics Ltd operates within the petrochemicals sector and is classified as a microcap company. Its market capitalisation remains modest, reflecting its scale and market presence. The company’s financial and operational challenges are compounded by sectoral pressures and competitive dynamics.
Given the current metrics and market environment, the stock’s Mojo Score stands at 12.0, which corresponds to the Strong Sell grade. This score is a composite measure reflecting the company’s overall risk and return profile, integrating quality, valuation, financial trend, and technical factors.
Summary of Key Metrics as of 21 February 2026
• Debt-Equity Ratio: 186.3 times (high leverage)
• Debt to EBITDA Ratio: 3.60 times (low debt servicing ability)
• Interest Expense (latest six months): ₹9.16 crores, up 34.31%
• Cash and Cash Equivalents: ₹7.25 crores (low liquidity)
• Promoter Shares Pledged: 26.36% (adds selling pressure risk)
• Stock Returns: 1 Year -24.60%, 6 Months -24.50%, 3 Months -15.34%, 1 Month +4.48%
These figures illustrate the precarious financial position and volatile stock performance that underpin the current rating.
Conclusion
Indian Acrylics Ltd’s Strong Sell rating by MarketsMOJO, last updated on 30 April 2024, remains justified by the company’s present-day fundamentals and market behaviour as of 21 February 2026. The combination of below-average quality, risky valuation, flat financial trends, and bearish technical indicators suggests that investors should approach this stock with caution. Monitoring future developments in debt management, profitability, and market conditions will be crucial for reassessing the stock’s outlook.
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