One of my custom shortcut has auto login parameter along with my login credential in clear text on the exec line. Is there trick how to write the login details portion in encrypted form and make Ubuntu prompts for password or something to decrypt it when I launch the shortcut?
Unfortunately, this is not generally possible.
Unless the program in question is willing to accept encrypted passwords as command-line arguments, then you must either supply the password in plaintext or omit it entirely.
Some common applications provide an option for prompting the user for their password immediately. For example, the