Quality Assessment: Robust Financial Health and Operational Efficiency
Pasupati Acrylon’s quality parameters remain strong, supported by its very positive financial performance in the second quarter of FY25-26. The company reported net sales of ₹280.25 crores and a PBDIT of ₹27.15 crores, both the highest recorded in recent quarters. Notably, net profit surged by an impressive 825.71%, highlighting operational efficiency and effective cost management. The company’s return on capital employed (ROCE) stands at a healthy 13.56%, with a half-yearly ROCE peak of 12.49%, indicating efficient utilisation of capital resources.
Additionally, Pasupati Acrylon maintains a low debt-to-equity ratio, averaging zero, which underscores its conservative capital structure and low financial risk. Return on equity (ROE) is recorded at 10.3%, further reinforcing the company’s ability to generate shareholder value. These quality metrics collectively contribute to the company’s strong Mojo Score of 77.0, which supports the Buy rating upgrade.
Valuation: From Very Attractive to Attractive Amid Fair Pricing
The valuation grade for Pasupati Acrylon has shifted from very attractive to attractive, reflecting a recalibration of market pricing relative to the company’s fundamentals. The stock currently trades at a price-to-earnings (PE) ratio of 11.00, which is modest compared to peers such as R&B Denims (PE 44.7) and Sumeet Industries (PE 75.81). The price-to-book value stands at 1.13, indicating the stock is priced close to its book value, a sign of fair valuation.
Enterprise value to EBITDA (EV/EBITDA) is 7.09, suggesting reasonable operational earnings relative to enterprise value. The PEG ratio of 1.04 indicates that the stock’s price growth is broadly in line with earnings growth, making it an attractive proposition for investors seeking value with growth potential. Compared to other textile industry players, Pasupati Acrylon’s valuation metrics position it favourably, balancing affordability with growth prospects.
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Financial Trend: Strong Profit Growth and Market Outperformance
Pasupati Acrylon’s financial trend has been notably positive, with operating profit growing at an annual rate of 67.58%. The company’s net profit growth of 825.71% in the recent quarter is a standout figure, reflecting both operational leverage and favourable market conditions. Over the past year, the stock has delivered a return of 14.24%, outperforming the Sensex’s 6.66% return over the same period.
Longer-term returns further highlight the company’s strong performance: a 3-year return of 57.89% versus Sensex’s 37.76%, and a remarkable 5-year return of 288.71% compared to Sensex’s 65.60%. Although the 10-year return of 168.98% trails the Sensex’s 244.38%, the recent acceleration in earnings and stock price suggests a positive trajectory. These financial trends underpin the upgraded Mojo Grade from Hold to Buy, reflecting confidence in sustained growth.
Technical Outlook: Shift to Mildly Bullish Momentum
The technical grade upgrade was a key driver behind the overall rating change. Pasupati Acrylon’s technical trend has shifted from sideways to mildly bullish, signalling improving market sentiment. Daily moving averages indicate a mildly bullish stance, supported by weekly and monthly Bollinger Bands showing mixed but improving signals—weekly mildly bearish but monthly bullish.
While the MACD remains bearish on weekly and mildly bearish on monthly charts, other indicators such as the Dow Theory weekly trend and On-Balance Volume (OBV) weekly readings are mildly bullish, suggesting accumulation and potential upward momentum. The relative strength index (RSI) on weekly and monthly charts shows no clear signal, indicating room for further price movement without being overbought.
Overall, the technical indicators suggest a cautious but positive outlook, justifying the upgrade in technical grade and contributing to the stock’s improved Mojo Score and Buy recommendation.
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Market Performance and Shareholding Structure
Pasupati Acrylon’s stock price closed at ₹48.55 on 5 February 2026, up 4.43% from the previous close of ₹46.49. The stock traded within a range of ₹46.84 to ₹49.14 during the day, with a 52-week high of ₹66.00 and a low of ₹37.55. This price movement reflects renewed investor interest following the upgrade.
The company’s majority shareholding remains with promoters, ensuring stable ownership and strategic direction. The stock’s market capitalisation grade is rated 4, indicating a mid-sized market cap within its sector, which offers a balance of liquidity and growth potential.
Comparative Industry Positioning
Within the textile and petrochemicals industry, Pasupati Acrylon’s valuation and financial metrics position it favourably against peers. While some competitors such as R&B Denims and Sumeet Industries trade at significantly higher PE ratios (44.7 and 75.81 respectively), Pasupati Acrylon’s PE of 11.00 and EV/EBITDA of 7.09 suggest a more reasonable valuation. This relative affordability combined with strong financial performance makes it an attractive option for investors seeking exposure to the sector.
Moreover, the company’s PEG ratio of 1.04 indicates that its price growth is aligned with earnings growth, a positive sign for sustainable returns. The absence of dividend yield data suggests reinvestment of earnings into growth initiatives, which may further enhance shareholder value over time.
Outlook and Investment Implications
The upgrade of Pasupati Acrylon Ltd’s investment rating to Buy reflects a holistic improvement across quality, valuation, financial trends, and technical indicators. The company’s strong quarterly results, low leverage, and efficient capital utilisation underpin its quality credentials. Meanwhile, the shift to an attractive valuation grade signals that the stock is reasonably priced relative to its earnings and peers.
Financial trends demonstrate robust profit growth and market outperformance, while technical indicators suggest a cautiously optimistic momentum shift. Together, these factors justify the increased Mojo Score of 77.0 and the Buy recommendation, signalling that Pasupati Acrylon is well-positioned to deliver value to investors in the near to medium term.
Investors should, however, monitor the stock’s price action and sector dynamics closely, given the mixed signals from some technical indicators and the broader market environment. Nonetheless, the current upgrade provides a compelling case for considering Pasupati Acrylon as a core holding within a diversified petrochemicals or textile portfolio.
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