Olympic Cards Ltd Downgraded to Strong Sell Amid Weak Fundamentals and Bearish Technicals

Quality Assessment: Weakening Fundamentals Despite Revenue Growth

Olympic Cards has reported a mixed financial performance in recent quarters. While net sales for the latest six months have grown by 22.30% to ₹5.21 crores, the company continues to grapple with significant losses. The latest quarter (Q2 FY25-26) saw the highest recorded PBDIT at a negative ₹0.29 crores and PBT less other income at a loss of ₹1.03 crores. These figures underscore the company’s inability to generate positive operating profits despite revenue growth.

More concerning is the company’s capital structure. Olympic Cards carries a high debt burden, with a debt-to-equity ratio of 18.67 times, indicating excessive leverage. This is compounded by a debt-to-EBITDA ratio of 13.16 times, signalling a weak capacity to service debt obligations. The company’s return on equity (ROE) remains negative, reflecting ongoing losses and poor capital efficiency. These factors contribute to a weak long-term fundamental strength grade, justifying the downgrade in quality assessment.

Valuation: Risky and Overvalued Relative to Historical Averages

The stock’s valuation metrics have deteriorated over the past year. Olympic Cards has underperformed the market significantly, delivering a negative return of -22.08% over the last 12 months, while the BSE500 index posted a positive return of 8.76% during the same period. Over longer horizons, the stock’s returns remain deeply negative, with a 10-year return of -79.02% compared to the Sensex’s 234.22% gain.

Despite this underperformance, the stock trades at valuations considered risky relative to its historical averages. The combination of negative EBITDA, losses, and high leverage has led to a valuation grade that signals caution. Investors are advised to be wary of the stock’s elevated risk profile given these valuation concerns.

Financial Trend: Mixed Signals with Negative Profitability and Debt Pressure

While the company’s sales growth is a positive sign, the overall financial trend remains negative. Profitability metrics have worsened, with profits falling by 54.3% over the past year. The company’s inability to convert sales growth into profits, coupled with high debt servicing costs, has led to a deteriorating financial trend grade.

Moreover, the negative EBITDA and losses reported in recent quarters highlight ongoing operational challenges. The weak financial trend is a key factor in the downgrade, reflecting the company’s struggle to improve its earnings quality and cash flow generation.

Technical Analysis: Shift to Bearish Momentum

The downgrade to Strong Sell is largely driven by a shift in technical indicators. The technical trend grade has moved from mildly bearish to bearish, reflecting increased downside momentum. Key technical signals present a mixed but predominantly negative picture:

• MACD on a weekly basis remains mildly bullish, but the monthly MACD is bearish, indicating longer-term weakness.
• Relative Strength Index (RSI) on both weekly and monthly charts shows no clear signal, suggesting indecision but no bullish momentum.
• Bollinger Bands are bullish on the weekly timeframe but bearish monthly, reinforcing the mixed short-term versus long-term outlook.
• Moving averages on a daily basis are mildly bearish, signalling downward pressure on price.
• KST (Know Sure Thing) indicator is bullish weekly but bearish monthly, again highlighting conflicting signals but with a longer-term bearish bias.
• Dow Theory analysis shows no clear trend weekly and only mildly bullish monthly, failing to provide strong confirmation of a recovery.

Overall, the technical picture is dominated by bearish monthly indicators, which have prompted the technical grade downgrade and contributed significantly to the overall rating shift.

Market Performance and Price Action

Olympic Cards closed at ₹3.00 on 27 January 2026, up 1.69% from the previous close of ₹2.95. The stock’s 52-week high stands at ₹4.27, while the 52-week low is ₹2.51, indicating a volatile trading range. Despite the slight uptick on the day, the stock’s weekly return is a steep -16.67%, far underperforming the Sensex’s -0.39% return over the same period.

This persistent underperformance relative to the benchmark index and sector peers further justifies the cautious stance adopted by analysts and the downgrade to Strong Sell.

Shareholding and Industry Context

Olympic Cards operates within the printing and publishing segment of the diversified consumer products industry. The majority shareholding remains with promoters, which can be a double-edged sword—providing stability but also concentration risk. Given the company’s financial stress and technical weakness, investors should carefully consider the risks associated with promoter-driven entities in this sector.

Conclusion: Strong Sell Rating Reflects Elevated Risk and Weak Outlook

The downgrade of Olympic Cards Ltd’s investment rating to Strong Sell by MarketsMOJO reflects a comprehensive reassessment of the company’s quality, valuation, financial trend, and technical outlook. Despite some revenue growth, the company’s weak profitability, excessive leverage, and negative returns have undermined investor confidence.

Technical indicators have shifted decisively towards bearishness, reinforcing the negative sentiment. The stock’s persistent underperformance relative to the Sensex and sector peers further highlights the challenges ahead. Investors should approach Olympic Cards with caution, considering the elevated risk profile and the availability of better alternatives in the diversified consumer products space.

MarketsMOJO’s current Mojo Score for Olympic Cards stands at 23.0, with a Mojo Grade of Strong Sell, downgraded from Sell on 27 January 2026. The company’s market cap grade remains at 4, reflecting its mid-tier size but not offsetting the fundamental and technical weaknesses.

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