Key Events This Week
2 Feb: Downgrade to Sell amid mixed technicals and weak financials
2 Feb: Technical momentum shifts to mildly bearish
6 Feb: Mixed quarterly results show stabilisation but revenue decline
6 Feb: Stock closes sharply lower at ₹10.15 (-4.96%)
2 February: Downgrade to Sell Reflects Persistent Weakness
On 2 February, Allcargo Logistics Ltd was downgraded by MarketsMOJO from a Strong Sell to a Sell rating, reflecting a nuanced shift in technical indicators amid ongoing financial difficulties. The Mojo Score settled at 34.0, signalling a cautious stance despite some mild technical improvements such as a weekly MACD turning mildly bullish and bullish RSI readings on weekly and monthly charts. However, the stock price closed at ₹10.22, down 1.92%, mirroring the broader market weakness as the Sensex fell 1.03% to 35,814.09.
The downgrade highlighted the company’s sharp decline in net sales, which fell 76.1% in Q2 FY25-26, and a negative profit after tax of ₹-15.59 crore for the nine months ended September 2025. Promoter holdings also declined significantly by 22.79% in the previous quarter, further dampening investor confidence. Despite a low Debt to EBITDA ratio of 1.50 times, the company’s ROCE remained subdued at 1.5%, underscoring limited capital efficiency.
Technical Momentum Shifts Amid Prolonged Underperformance
The same day, technical analysis revealed a subtle shift from a strongly bearish to a mildly bearish trend. While daily moving averages remained bearish and the stock traded below key averages at ₹10.25, weekly MACD and RSI indicators suggested tentative signs of stabilisation. The weekly RSI rose above 50, indicating emerging short-term strength, though monthly MACD and KST indicators remained bearish, reflecting entrenched longer-term weakness.
Volume-based indicators such as On-Balance Volume and Dow Theory showed no clear trend, signalling market indecision. The stock’s 52-week range remained wide, with a low of ₹8.95 and a high of ₹42.89, emphasising the severity of its decline. The Sensex’s recovery contrasted with Allcargo’s struggles, as the stock’s one-week return was negative while the benchmark gained 1.51%.
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6 February: Mixed Quarterly Results Signal Stabilisation Amid Revenue Decline
On 6 February, Allcargo Logistics reported mixed quarterly results for December 2025, revealing a complex financial picture. Net sales plunged 62.5% to ₹516 crore compared to the previous four-quarter average, reflecting ongoing sectoral headwinds and subdued demand. Despite this, the company’s six-month profit after tax improved to ₹22 crore, signalling operational efficiencies and cost control measures beginning to take effect.
However, the nine-month PAT remained down 61.9% year-on-year at ₹6 crore, underscoring persistent earnings pressure. Cash and cash equivalents stood at ₹138 crore, the lowest in recent periods, raising liquidity concerns. The financial trend score improved from -10 to -6 over three months, indicating a shift from negative to flat performance, though the outlook remains cautious.
The stock price reacted negatively, closing at ₹10.15, down 4.96% on the day, amid volatility and investor uncertainty. This decline contrasted with the Sensex’s modest 0.10% gain to 36,730.20, highlighting the stock’s continued underperformance relative to the broader market.
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Weekly Price Performance: Stock vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-02 | ₹10.22 | -1.92% | 35,814.09 | -1.03% |
| 2026-02-03 | ₹10.26 | +0.39% | 36,755.96 | +2.63% |
| 2026-02-04 | ₹10.62 | +3.51% | 36,890.21 | +0.37% |
| 2026-02-05 | ₹10.68 | +0.56% | 36,695.11 | -0.53% |
| 2026-02-06 | ₹10.15 | -4.96% | 36,730.20 | +0.10% |
Key Takeaways
Mixed Technical Signals: The week saw a shift from strongly bearish to mildly bearish technical momentum, with weekly MACD and RSI indicators showing tentative strength. However, monthly indicators and moving averages remain bearish, indicating no confirmed reversal.
Financial Performance Under Pressure: Despite some stabilisation in profitability over six months, the company’s sharp revenue decline and negative nine-month PAT highlight ongoing operational challenges. Liquidity concerns persist with cash reserves at a recent low.
Market Sentiment and Rating: The downgrade to a Sell rating by MarketsMOJO reflects cautious investor sentiment amid weak fundamentals and declining promoter confidence. The Mojo Score of 34.0 underscores the stock’s risk profile.
Price Volatility and Underperformance: The stock closed the week down 2.59%, underperforming the Sensex’s 1.51% gain. The sharp drop on 6 February emphasises persistent volatility and investor uncertainty.
Conclusion
Allcargo Logistics Ltd’s week was characterised by a complex interplay of mild technical improvements overshadowed by persistent financial weakness and market scepticism. The downgrade to Sell and mixed quarterly results underscore the challenges the company faces in reversing its prolonged downtrend. While some operational efficiencies have improved profitability in recent months, the steep revenue contraction and liquidity pressures remain significant headwinds. The stock’s underperformance relative to the Sensex and volatile price action suggest that investors should maintain a cautious stance, closely monitoring upcoming financial disclosures and sector developments before considering exposure to this small-cap transport services stock.
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