The stock, trading at ₹3.05 as of February 13, 2026, has declined 17.34% over the past year, significantly underperforming the Sensex's 8.96% gain and the broader diversified consumer products sector's 10.57% decline. With a price-to-book value of 3.71x and a loss-making P/E ratio, the valuation appears disconnected from the underlying business reality. The company's quality grade remains "Below Average," and its overall Mojo Score stands at a concerning 39 out of 100, warranting a "SELL" recommendation.
Financial Performance: Revenue Growth Cannot Hide Operational Weakness
Olympic Cards' Q3 FY26 results present a study in contrasts. Net sales reached ₹3.36 crores, marking a robust 48.02% year-on-year increase and a 10.16% sequential improvement from Q2 FY26's ₹3.05 crores. For the nine-month period ending December 2025, the company generated revenues of ₹8.57 crores, representing a 30.96% year-on-year growth over the corresponding period last year.
However, this top-line expansion has failed to translate into operational profitability. The operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) deteriorated to a loss of ₹0.55 crores in Q3 FY26, compared to a loss of ₹0.50 crores in Q3 FY25. This represents an operating margin of negative 16.37%, which, whilst an improvement from the negative 22.03% margin recorded a year ago, still reflects a fundamentally unprofitable core business model.
The reported PAT margin of 98.51% in Q3 FY26 is entirely misleading. This extraordinary figure stems from a tax credit of ₹2.22 crores, which resulted in a negative tax rate of 203.67% for the quarter. Without this one-time benefit, the company would have reported a pre-tax loss of ₹1.09 crores, translating into a continued net loss after accounting for normal tax provisions.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | YoY Growth | Operating Profit (₹ Cr) | Op. Margin | Net Profit (₹ Cr) |
|---|---|---|---|---|---|---|
| Dec'25 | 3.36 | +10.16% | +48.02% | -0.55 | -16.37% | 3.31 |
| Sep'25 | 3.05 | +41.20% | +32.03% | -0.29 | -9.51% | -1.00 |
| Jun'25 | 2.16 | -24.74% | +10.77% | -0.37 | -17.13% | -1.02 |
| Mar'25 | 2.87 | +26.43% | — | -0.33 | -11.50% | -0.93 |
| Dec'24 | 2.27 | -1.73% | — | -0.50 | -22.03% | -1.14 |
| Sep'24 | 2.31 | +18.46% | — | -0.45 | -19.48% | -0.90 |
| Jun'24 | 1.95 | — | — | -0.50 | -25.64% | -1.41 |
The quarterly trend analysis reveals persistent operational challenges. Across the past seven quarters, Olympic Cards has failed to generate positive operating profit even once. Operating margins have consistently remained in deeply negative territory, ranging from negative 9.51% to negative 25.64%. This pattern suggests structural issues within the business model rather than temporary cyclical headwinds.
Operational Challenges: The Other Income Dependency Trap
A critical red flag emerges when examining the composition of profitability. In Q3 FY26, Olympic Cards reported other income of ₹2.24 crores, which constituted a staggering 205.50% of profit before tax. This means the company's reported pre-tax profit of ₹1.09 crores was entirely dependent on non-operating income, with the core business generating substantial losses.
Critical Concern: Non-Operating Income Dependency
Other Income as % of PBT: 205.50% in Q3 FY26
Olympic Cards' profitability is artificially propped up by non-operating income. The core business remains deeply unprofitable, with operating losses of ₹0.55 crores in the latest quarter. This dependency on other income sources, combined with the exceptional tax credit, creates an unsustainable earnings profile that cannot support long-term value creation.
From a capital efficiency perspective, the company's performance is equally concerning. The average return on equity (ROE) stands at 0.00%, whilst the latest ROE has plummeted to negative 309.85%, reflecting the erosion of shareholder value. The average return on capital employed (ROCE) is negative 10.31%, worsening to negative 11.94% in the most recent period. These metrics indicate that Olympic Cards is destroying capital rather than generating returns for investors.
The balance sheet reveals a precarious financial position. As of March 2025, shareholder funds had shrunk to ₹1.31 crores from ₹5.71 crores a year earlier, a decline of 77.05%. This erosion stems from accumulated losses, with reserves and surplus deteriorating from negative ₹10.60 crores to negative ₹14.99 crores during the same period. The company's book value per share stands at a mere ₹0.81, yet the stock trades at ₹3.05, representing a price-to-book multiple of 3.71x—a valuation that appears entirely disconnected from the underlying asset base.
The Leverage Trap: Debt Burden Compounds Operating Losses
Olympic Cards operates under a crushing debt burden that amplifies its operational challenges. The company's debt-to-equity ratio stands at an alarming 18.67 times, indicating that debt is nearly 19 times the size of shareholder equity. Long-term debt amounted to ₹15.84 crores as of March 2025, whilst shareholder funds totalled just ₹1.31 crores.
Interest expenses consumed ₹0.39 crores in Q3 FY26, representing 11.61% of net sales. For a company already operating at negative margins, this interest burden creates a vicious cycle: operational losses are magnified by financing costs, leading to further equity erosion, which in turn increases leverage ratios. The average EBIT-to-interest coverage ratio of negative 0.71x confirms that the company's earnings are insufficient to service its debt obligations.
Structural Imbalance: The Debt Spiral
With operational losses persisting across multiple quarters and a debt-to-equity ratio of 18.67x, Olympic Cards faces a structural imbalance that threatens its long-term viability. The company's inability to generate positive operating cash flow, combined with significant interest obligations, creates a precarious financial position. Unless the business model undergoes fundamental transformation, the current capital structure appears unsustainable.
Cash flow analysis provides further evidence of financial stress. For FY25, the company generated operating cash flow of ₹3.00 crores, but this was insufficient to cover investing and financing requirements. The company has consistently relied on asset sales and working capital adjustments to meet its obligations, rather than generating cash from profitable operations.
Peer Comparison: Lagging on All Key Metrics
When benchmarked against peers in the diversified consumer products sector, Olympic Cards' underperformance becomes starkly evident. The company's ROE of 0.00% lags significantly behind peers such as Pearl Polymers (21.02%) and Technopack Polymers (8.63%). Even Amin Tannery, with a modest 3.26% ROE, outperforms Olympic Cards substantially.
| Company | P/E (TTM) | Div Yield | ROE (%) | Debt-to-Equity | P/BV |
|---|---|---|---|---|---|
| Olympic Cards | NA (Loss Making) | — | 0.00% | 18.67 | 3.71 |
| Pearl Polymers | NA (Loss Making) | — | 21.02% | -0.81 | 0.93 |
| Amin Tannery | 60.95 | — | 3.26% | 2.16 | 1.45 |
| Technopack Poly. | 10.06 | — | 8.63% | 0.16 | 0.85 |
| NB Footwear | NA (Loss Making) | — | 0.00% | 0.00 | -6.66 |
The leverage comparison is particularly unfavourable. Whilst Technopack Polymers operates with a conservative debt-to-equity ratio of 0.16x and Pearl Polymers maintains a net cash position (negative 0.81x debt-to-equity), Olympic Cards' 18.67x ratio stands out as an extreme outlier. This excessive leverage not only constrains financial flexibility but also amplifies downside risks during periods of operational stress.
Valuation metrics offer little comfort. Olympic Cards trades at a price-to-book value of 3.71x, significantly higher than most peers despite its inferior fundamentals. Pearl Polymers trades at 0.93x book value with superior profitability, whilst Technopack Polymers commands just 0.85x despite generating positive returns. This valuation premium appears entirely unjustified given Olympic Cards' loss-making status and deteriorating balance sheet.
Valuation Analysis: Premium Without Justification
Olympic Cards' current valuation defies fundamental logic. With a market capitalisation of ₹5.00 crores and a book value of ₹1.31 crores, the stock trades at 3.71 times book value despite negative returns on equity and persistent operational losses. The company's enterprise value-to-EBITDA multiple of negative 19.82x and EV-to-EBIT of negative 10.62x reflect the loss-making nature of the business.
The valuation grade has been classified as "RISKY" since October 2023, with multiple downgrades reflecting the company's deteriorating financial profile. Historical dividend payments have ceased, with the last dividend of ₹0.50 per share paid in September 2015. The current dividend yield is non-existent, offering no income support for investors.
Given the company's structural challenges, persistent losses, and excessive leverage, a fair value estimate is difficult to establish using traditional valuation methodologies. However, considering the book value of ₹0.81 per share and the quality of that book value (heavily eroded by accumulated losses), a price-to-book multiple of 1.0x would suggest a fair value of approximately ₹0.81 per share. This represents a potential downside of 73.44% from the current market price of ₹3.05, highlighting the severity of the valuation disconnect.
Shareholding: Stable but Uninspiring Pattern
The shareholding pattern of Olympic Cards has remained remarkably stable over recent quarters, with promoter holding consistently at 60.77% and non-institutional investors holding the remaining 39.23%. There has been zero institutional participation, with FII, mutual fund, insurance, and other DII holdings all standing at 0.00%.
| Quarter | Promoter % | FII % | MF % | Insurance % | Other DII % | Non-Inst % |
|---|---|---|---|---|---|---|
| Dec'25 | 60.77% | 0.00% | 0.00% | 0.00% | 0.00% | 39.23% |
| Sep'25 | 60.77% | 0.00% | 0.00% | 0.00% | 0.00% | 39.23% |
| Jun'25 | 60.77% | 0.00% | 0.00% | 0.00% | 0.00% | 39.23% |
| Mar'25 | 60.77% | 0.00% | 0.00% | 0.00% | 0.00% | 39.23% |
| Dec'24 | 60.77% | 0.00% | 0.00% | 0.00% | 0.00% | 39.23% |
The complete absence of institutional investors signals a lack of confidence from sophisticated market participants. Mutual funds, foreign institutional investors, and insurance companies have shown no interest in accumulating shares, likely due to the company's poor fundamentals, micro-cap status, and limited liquidity. The stable promoter holding of 60.77% provides some governance continuity, but notably, there has been no promoter buying to support the stock or demonstrate confidence in the business turnaround prospects.
Positively, there is no promoter pledging, eliminating one potential risk factor. However, the absence of institutional participation and the lack of any meaningful change in shareholding patterns over five consecutive quarters suggest a stock that remains off the radar of professional investors.
Stock Performance: Severe Underperformance Across All Timeframes
Olympic Cards' stock performance has been dismal across virtually all relevant timeframes. Over the past year, the stock has declined 17.34%, underperforming the Sensex by 26.30 percentage points. The underperformance extends across multiple periods, with the stock generating negative alpha in nine out of ten measured timeframes.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +8.93% | -0.74% | +9.67% |
| 1 Month | -5.28% | -0.80% | -4.48% |
| 3 Month | +8.16% | -1.80% | +9.96% |
| 6 Month | +3.04% | +3.01% | +0.03% |
| YTD | -4.69% | -2.65% | -2.04% |
| 1 Year | -17.34% | +8.96% | -26.30% |
| 2 Years | -29.89% | +15.94% | -45.83% |
| 3 Years | -5.86% | +37.28% | -43.14% |
| 5 Years | -7.58% | +60.95% | -68.53% |
| 10 Years | -83.06% | +260.92% | -343.98% |
The long-term performance is particularly alarming. Over a 10-year horizon, Olympic Cards has declined 83.06% whilst the Sensex has surged 260.92%, resulting in a staggering negative alpha of 343.98 percentage points. This represents one of the most severe cases of sustained value destruction in the Indian equity market.
Risk-adjusted metrics paint an equally grim picture. The stock's volatility stands at 83.02%, approximately seven times higher than the Sensex's 11.46% volatility. With a beta of 1.50, the stock is 50% more volatile than the broader market. The risk-adjusted return of negative 0.21 confirms that investors have been compensated negatively for the substantial risks undertaken.
From a technical perspective, the stock currently exhibits a "MILDLY BULLISH" trend as of February 9, 2026, having reversed from a bearish trend. However, this technical bounce appears fragile, with the stock trading below its 20-day, 50-day, 100-day, and 200-day moving averages. The recent one-week gain of 8.93% should be viewed in the context of the severe long-term underperformance rather than as a sign of sustainable reversal.
Investment Thesis: Deteriorating Fundamentals Override Technical Bounce
The investment thesis for Olympic Cards is overwhelmingly negative across all key parameters. The company's quality grade remains "BELOW AVERAGE," reflecting weak long-term financial performance characterised by negative 11.52% five-year sales growth and an average ROCE of negative 10.31%. The excessive leverage, with a debt-to-equity ratio of 18.67x, amplifies the financial risk profile.
Whilst the short-term financial trend has been classified as "POSITIVE" due to the nine-month revenue growth of 39.96% and the exceptional Q3 net profit, this assessment is misleading. The positive financial trend is entirely attributable to unsustainable factors: a one-time tax credit and extraordinary other income. The underlying operational performance remains deeply negative, with persistent losses at the EBITDA level.
The technical trend, whilst showing a recent bounce to "MILDLY BULLISH," provides little reassurance. Technical indicators remain mixed, with MACD showing mildly bullish signals on the weekly chart but bearish on the monthly timeframe. Bollinger Bands indicate bullish positioning on the weekly chart but mildly bearish on the monthly chart. Given the stock's extreme volatility (83.02%) and the weak fundamental backdrop, any technical bounce should be viewed as a potential exit opportunity rather than an entry point.
Key Strengths & Risk Factors
Key Strengths
- Revenue Growth Momentum: Net sales grew 48.02% YoY in Q3 FY26 and 30.96% for the nine-month period, indicating improving market traction.
- No Promoter Pledging: Zero promoter share pledging eliminates one governance risk factor.
- Improving Operating Margins: Operating margin improved from negative 22.03% in Q3 FY25 to negative 16.37% in Q3 FY26, showing some cost management progress.
- Stable Promoter Holding: Consistent 60.77% promoter holding provides governance continuity.
- Recent Technical Bounce: Stock has turned mildly bullish after a prolonged bearish phase, with one-week gains of 8.93%.
Key Concerns
- Persistent Operating Losses: Seven consecutive quarters of negative operating profit, with Q3 FY26 loss at ₹0.55 crores despite revenue growth.
- Artificial Profitability: Q3 net profit of ₹3.31 crores entirely due to ₹2.22 crores tax credit; underlying business remains loss-making.
- Excessive Leverage: Debt-to-equity ratio of 18.67x creates financial fragility and limits strategic flexibility.
- Capital Destruction: ROE of negative 309.85% and ROCE of negative 11.94% indicate severe value destruction.
- Zero Institutional Interest: Complete absence of FII, mutual fund, and insurance participation signals lack of sophisticated investor confidence.
- Severe Long-Term Underperformance: Stock down 83.06% over 10 years whilst Sensex gained 260.92%.
- Valuation Disconnect: Trading at 3.71x book value despite loss-making status and deteriorating fundamentals.
Outlook: What Lies Ahead
Potential Positive Catalysts
- Sustained Revenue Growth: If the company can maintain 30%+ top-line growth whilst improving operational efficiency.
- Margin Turnaround: Achievement of positive operating margins through cost rationalisation and scale benefits.
- Debt Restructuring: Successful deleveraging through asset sales or equity infusion to reduce the 18.67x debt-to-equity ratio.
- Business Model Pivot: Strategic repositioning or diversification to address structural profitability challenges.
Critical Red Flags to Monitor
- Continued Operating Losses: Failure to achieve positive EBITDA in upcoming quarters would confirm structural unprofitability.
- Debt Service Challenges: Any missed interest payments or covenant breaches given the negative EBIT-to-interest coverage.
- Further Equity Erosion: Continued losses leading to shareholder funds falling below ₹1 crore.
- Revenue Reversal: Loss of top-line momentum would eliminate the one positive aspect of current performance.
- Promoter Exits: Any reduction in promoter holding would signal loss of confidence in turnaround prospects.
The Verdict: Exit Whilst Liquidity Permits
Score: 39/100
For Fresh Investors: Avoid completely. Olympic Cards presents a classic value trap with persistent operational losses, excessive leverage, and no clear path to profitability. The recent tax-credit-driven profit is a one-time accounting benefit that masks fundamental deterioration. With a debt-to-equity ratio of 18.67x and negative operating margins across seven consecutive quarters, the business model appears structurally broken.
For Existing Holders: Use any technical bounce as an exit opportunity. The stock's 8.93% gain over the past week provides temporary liquidity that should be utilised to reduce exposure. The valuation of 3.71x book value is entirely unjustified given the quality of earnings and persistent capital destruction. Long-term holders have already suffered an 83.06% decline over 10 years; further patience is unlikely to be rewarded without fundamental business transformation.
Fair Value Estimate: ₹0.81 per share (73.44% downside from current price of ₹3.05). This estimate is based on 1.0x price-to-book value, which itself may be generous given the eroded quality of the balance sheet. The risk-reward profile is overwhelmingly skewed to the downside.
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions.
