Stock Performance and Market Context
On 12 Jan 2026, Associated Alcohols & Breweries Ltd (Stock ID: 953735) touched an intraday low of Rs.877.35, representing a 2.77% drop from the previous close. Despite this, the stock marginally outperformed its sector by 0.81% on the day. Notably, the stock has reversed its trend after five consecutive days of decline, indicating some short-term price recovery.
The stock currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. This contrasts with the broader market, where the Sensex recovered from an early dip to close 0.09% higher at 83,647.99, just 3% shy of its 52-week high of 86,159.02. Mega-cap stocks led the market rally, while Associated Alcohols & Breweries Ltd, a mid-cap player in the beverages sector, lagged behind.
Financial Performance Highlights
The company’s one-year stock performance shows a decline of 23.51%, significantly underperforming the Sensex’s 8.10% gain and the BSE500’s 7.18% return over the same period. This underperformance is mirrored in the company’s quarterly financials. Net sales for the latest quarter stood at Rs.253.84 crores, down 6.9% compared to the previous four-quarter average. Profit after tax (PAT) also declined sharply by 35.9% to Rs.14.01 crores, indicating pressure on profitability.
Despite these setbacks, the company maintains a low average debt-to-equity ratio of 0.05 times, reflecting a conservative capital structure. Return on capital employed (ROCE) remains robust at 17.9%, and the enterprise value to capital employed ratio is an attractive 2.7, suggesting the stock is trading at a discount relative to its capital base.
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Valuation and Market Sentiment
The company’s Mojo Score stands at 31.0, with a Mojo Grade of Sell, downgraded from Hold on 20 Oct 2025. This reflects concerns over the company’s growth trajectory and recent financial results. The market capitalisation grade is low at 3, consistent with its mid-cap status and recent price performance.
Despite the stock’s recent weakness, certain valuation metrics remain favourable. The company’s profits have increased by 48.8% over the past year, resulting in a price/earnings to growth (PEG) ratio of 0.5, which is considered low. This suggests that the stock is trading at a discount relative to its earnings growth potential, although this has not yet translated into price appreciation.
Promoter confidence appears to be strengthening, with promoters increasing their stake by 1.93% in the previous quarter to hold 61.22% of the company. This increase in promoter holding may be interpreted as a sign of commitment to the business despite recent market headwinds.
Comparative Sector and Market Analysis
Within the beverages sector, Associated Alcohols & Breweries Ltd has faced challenges that have weighed on its stock price. While the broader market and sector indices have shown resilience, the company’s stock has not kept pace. The 52-week high for the stock was Rs.1,496.30, highlighting the extent of the recent decline to the current low of Rs.877.35.
The company’s debtor turnover ratio, a measure of how efficiently it collects receivables, is at a low 20.39 times for the half year, which may indicate slower cash conversion cycles compared to peers. This metric, combined with declining sales and profits, has contributed to the cautious market stance.
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Summary of Key Metrics
To summarise, Associated Alcohols & Breweries Ltd’s stock has declined to Rs.877.35, its lowest level in the past year, reflecting a 23.51% drop over 12 months. This contrasts with the Sensex’s positive 8.10% return and the BSE500’s 7.18% gain. The company’s quarterly net sales and PAT have both decreased compared to recent averages, while its low debt and strong ROCE provide some financial stability. The downgrade to a Sell rating by MarketsMOJO and the low Mojo Score underline the cautious outlook on the stock’s near-term prospects.
Promoter stake increases and attractive valuation ratios offer some counterbalance to the recent price weakness, but the stock remains below all major moving averages, indicating continued pressure in the market.
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