Why is Allcargo Logist. falling/rising?

Persistent Downtrend and Market Underperformance

Allcargo Logistics has been on a steady decline, with the stock losing 11.74% over the past week and 14.44% in the last month. This contrasts sharply with the Sensex, which has remained relatively flat, posting marginal gains of 0.02% and 0.14% over the same periods respectively. The year-to-date performance of Allcargo Logistics is particularly stark, with the stock plunging 77.69%, while the Sensex has gained 8.37%. Over the last year, the stock has fallen 79.37%, a dramatic underperformance compared to the Sensex’s 3.59% rise. Even over longer horizons, the stock has consistently lagged, with a five-year decline of 57.70% against the Sensex’s robust 81.46% gain.

On 16-Dec, the stock hit a new 52-week and all-time low of ₹10.99, underscoring the severity of the sell-off. The share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. Despite this, investor participation has increased, with delivery volumes on 15 Dec rising by 28.46% compared to the five-day average, suggesting heightened trading activity amid the decline.

Financial Performance and Profitability Challenges

The company’s financial results have been a major factor weighing on investor sentiment. In the quarter ending September 2025, net sales plummeted by 76.1% to ₹537 crore compared to the previous four-quarter average. This sharp contraction in revenue has severely impacted profitability, with the profit after tax (PAT) for the nine months ending September 2025 declining by 34.41% to a loss of ₹15.59 crore. Additionally, cash and cash equivalents have dwindled to ₹138 crore, the lowest level recorded in the half-year period, raising concerns about liquidity and operational resilience.

Long-term growth prospects appear bleak, as operating profit has contracted at an annualised rate of 39.45% over the past five years. This sustained erosion of earnings power has contributed to the stock’s poor returns and diminished investor confidence. Despite a relatively low Debt to EBITDA ratio of 1.50 times, indicating manageable debt servicing capability, the company’s return on capital employed (ROCE) stands at a modest 1.5%, reflecting limited efficiency in generating profits from its capital base.

Valuation and Shareholding Structure

While the stock is trading at an attractive valuation, with an enterprise value to capital employed ratio of 1.2, this discount appears to be a reflection of the market’s cautious stance given the company’s deteriorating fundamentals. Promoters remain the majority shareholders, but this has not translated into positive momentum for the stock amid ongoing operational challenges.

Conclusion: Why the Stock Is Falling

The decline in Allcargo Logistics’ share price on 16-Dec is the culmination of several adverse factors. The company’s weak quarterly sales and profit figures have eroded investor confidence, while the persistent underperformance relative to the Sensex and sector benchmarks has further dampened sentiment. The stock’s breach of key technical support levels and its new 52-week low reinforce the negative outlook. Although the company maintains a reasonable debt position and an attractive valuation relative to peers, these positives are overshadowed by poor long-term growth, shrinking profits, and liquidity concerns.

Investors should remain cautious given the stock’s consistent underperformance over multiple timeframes and the absence of clear catalysts for a turnaround. The current market environment and financial metrics suggest that the downward trend may continue until there is a meaningful improvement in operational results and investor sentiment.

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