Campus Activewear Ltd is Rated Strong Sell

Current Rating Overview

MarketsMOJO’s Strong Sell rating for Campus Activewear Ltd indicates a cautious stance for investors, signalling concerns about the company’s near-term prospects. This rating was assigned on 09 Jan 2026, following a detailed review of the company’s fundamentals, valuation, financial trends, and technical indicators. The Mojo Score currently stands at 28.0, down from 34.0 previously, reflecting a deterioration in the overall assessment.

Quality Assessment

As of 23 January 2026, Campus Activewear’s quality grade is classified as average. The company has demonstrated modest growth over the past five years, with net sales increasing at an annualised rate of 2.60% and operating profit growing at 2.04%. While these figures suggest some stability, they fall short of the robust growth rates typically favoured by investors seeking strong quality metrics. Additionally, the return on capital employed (ROCE) for the half-year ended September 2025 is at a low 16.12%, signalling limited efficiency in generating returns from capital invested.

Valuation Perspective

Despite the challenges in quality and financial trends, the valuation grade for Campus Activewear is currently attractive. This suggests that the stock is trading at a relatively low price compared to its earnings and book value, potentially offering value for investors willing to accept higher risk. However, attractive valuation alone does not offset the concerns raised by other parameters, especially given the company’s recent financial performance and technical outlook.

Financial Trend Analysis

The financial grade for Campus Activewear is negative as of today’s date. The latest quarterly results for September 2025 reveal a significant decline in profitability, with profit before tax excluding other income (PBT LESS OI) falling by 38.4% to ₹21.80 crores compared to the previous four-quarter average. Similarly, profit after tax (PAT) dropped by 32.0% to ₹20.07 crores. These declines highlight operational challenges and pressure on margins. Furthermore, the stock has consistently underperformed the BSE500 benchmark over the last three years, delivering a negative return of 8.16% over the past year and underperforming in each of the previous two annual periods as well.

Technical Outlook

From a technical standpoint, the stock is graded bearish. Recent price movements show a mixed short-term performance with a 1-day gain of 0.33% and a 1-week gain of 2.14%, but these are overshadowed by negative returns over longer periods: -0.97% in one month, -8.64% over three months, and -11.22% over six months. Year-to-date, the stock has declined by 2.25%. This downward momentum suggests that market sentiment remains weak, and technical indicators do not currently support a positive near-term outlook.

Implications for Investors

For investors, the Strong Sell rating implies that caution is warranted when considering Campus Activewear Ltd. The combination of average quality, attractive valuation, negative financial trends, and bearish technical signals suggests that the stock faces multiple headwinds. While the valuation may appeal to value-oriented investors, the deteriorating profitability and consistent underperformance relative to benchmarks indicate risks that could persist in the near term.

Sector and Market Context

Operating within the footwear sector, Campus Activewear is classified as a small-cap company. The sector itself has seen varied performance, with some companies benefiting from lifestyle trends and increased consumer spending. However, Campus Activewear’s modest growth and recent financial setbacks contrast with more resilient peers, underscoring the importance of careful stock selection within this space.

Summary of Key Metrics as of 23 January 2026

The stock’s recent performance metrics reinforce the cautious stance. Over the past year, Campus Activewear has delivered a negative return of 8.16%, underperforming the broader market benchmark BSE500 consistently over the last three years. The company’s operating profit and net sales growth rates remain subdued, while quarterly profitability has declined sharply. Technical indicators reflect bearish momentum, with the stock price trending downward over the medium term.

Conclusion

In conclusion, Campus Activewear Ltd’s Strong Sell rating by MarketsMOJO reflects a comprehensive evaluation of its current fundamentals and market position. Investors should weigh the company’s attractive valuation against its average quality, negative financial trends, and bearish technical outlook. This rating serves as a signal to approach the stock with caution, considering the risks highlighted by recent performance data and sector dynamics.

As always, investors are advised to conduct their own due diligence and consider their risk tolerance before making investment decisions related to Campus Activewear Ltd or any other stock.

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