Campus Activewear Ltd Downgraded to Strong Sell Amid Technical and Financial Weakness

Technical Trends Turn Bearish

The most significant trigger for the downgrade was the change in Campus Activewear’s technical grade, which shifted from mildly bearish to outright bearish. Key technical indicators paint a challenging picture for the stock’s near-term momentum. The Moving Average Convergence Divergence (MACD) is bearish on a weekly basis and mildly bearish monthly, signalling sustained downward pressure. Similarly, Bollinger Bands show bearish trends both weekly and monthly, indicating increased volatility with a downward bias.

Other technical metrics such as the KST (Know Sure Thing) indicator and On-Balance Volume (OBV) are also bearish or mildly bearish across weekly and monthly timeframes. The Relative Strength Index (RSI) remains neutral with no clear signal, but the overall technical summary is negative. Daily moving averages confirm the bearish stance, reinforcing the technical downgrade. The Dow Theory readings are mixed, mildly bearish weekly but mildly bullish monthly, yet the dominant trend remains negative.

These technical signals collectively suggest that investor sentiment is weakening, and the stock price is likely to face continued downward pressure in the short to medium term.

Financial Trend Weakness

Financially, Campus Activewear has exhibited disappointing performance in recent quarters, which has contributed to the downgrade. The company reported a significant decline in profitability in Q2 FY25-26, with Profit Before Tax (PBT) excluding other income falling by 38.4% to ₹21.80 crores compared to the previous four-quarter average. Net Profit After Tax (PAT) also declined sharply by 32.0% to ₹20.07 crores over the same period.

Return on Capital Employed (ROCE) for the half-year ended was at a low 16.12%, signalling reduced efficiency in generating returns from capital invested. Over the last five years, the company’s net sales have grown at a modest annual rate of 2.60%, while operating profit growth has been even slower at 2.04% per annum. This sluggish growth contrasts unfavourably with sector peers and broader market benchmarks.

Moreover, Campus Activewear has consistently underperformed the BSE500 index over the past three years, with a negative stock return of -11.4% in the last year alone, compared to a positive 7.67% return for the Sensex. Over three years, the stock has lost 34.63%, while the Sensex gained 37.58%, highlighting persistent underperformance.

Valuation and Quality Assessment

Despite the weak financial results, some valuation metrics remain relatively attractive. The company’s ROCE stands at a respectable 18.57%, reflecting strong management efficiency. Debt servicing capability is robust, with a low Debt to EBITDA ratio of 1.27 times, indicating manageable leverage levels.

Campus Activewear’s valuation is appealing on certain parameters, trading at an enterprise value to capital employed ratio of 7, which is below the average historical valuations of its peers. This discount could be a positive for value investors. However, the company’s PEG ratio of 2.3 suggests that earnings growth is not sufficiently priced in, given the modest profit growth of 27.2% over the past year.

Quality-wise, the company’s Mojo Score remains low at 28.0, with a Mojo Grade of Strong Sell, downgraded from Sell on 9 January 2026. The Market Cap Grade is 3, indicating a smaller market capitalisation relative to larger, more liquid stocks. These ratings reflect concerns about the company’s overall quality and growth prospects.

Stock Price and Market Performance

Campus Activewear’s stock price closed at ₹254.05 on 12 January 2026, down 1.99% from the previous close of ₹259.20. The stock has traded within a 52-week range of ₹215.00 to ₹314.95, currently closer to the lower end, signalling weakness. The day’s trading range was ₹254.00 to ₹265.75, showing limited upward momentum.

Short-term returns have been negative, with a one-week return of -2.96% and a one-month return of -6.24%, both underperforming the Sensex’s respective returns of -2.55% and -1.29%. Year-to-date, the stock is down 2.96%, compared to the Sensex’s decline of 1.93%, reinforcing the bearish sentiment.

Institutional Investor Activity

One positive note amid the downgrade is the increasing participation by institutional investors. Their collective stake has risen by 0.71% over the previous quarter, now representing 18.44% of the company’s shareholding. Institutional investors typically possess greater analytical resources and a longer-term investment horizon, which may provide some stability to the stock despite current headwinds.

However, this increased institutional interest has not yet translated into a positive price trend, as the stock continues to face selling pressure and technical weakness.

Summary and Outlook

In summary, Campus Activewear Ltd’s downgrade to Strong Sell is primarily driven by a deteriorating technical outlook, weak recent financial results, and persistent underperformance relative to market benchmarks. While valuation metrics and management efficiency offer some positives, they are insufficient to offset the negative trends in profitability and price momentum.

Investors should be cautious given the bearish technical signals and the company’s inability to generate consistent growth over the medium term. The stock’s current discount to peers may attract value investors, but the risks remain elevated until there is a clear turnaround in financial performance and technical indicators.

Key Data at a Glance:

• Mojo Score: 28.0 (Strong Sell, downgraded from Sell on 09 Jan 2026)


• Market Cap Grade: 3


• Current Price: ₹254.05 (down 1.99% on 12 Jan 2026)


• 52-Week Range: ₹215.00 - ₹314.95


• Q2 FY25-26 PBT (excl. other income): ₹21.80 crores (-38.4%)


• Q2 FY25-26 PAT: ₹20.07 crores (-32.0%)


• ROCE (HY): 16.12%


• Debt to EBITDA: 1.27 times


• PEG Ratio: 2.3


• Institutional Holding: 18.44% (+0.71% QoQ)

Given these factors, the downgrade to Strong Sell reflects a cautious stance on Campus Activewear Ltd, signalling that investors should consider alternative opportunities until a sustained improvement in fundamentals and technicals emerges.

Unlock special upgrade rates for a limited period. Start Saving Now →