Recent Price Movement and Market Context
On the day the new low was recorded, Lovable Lingerie’s stock price fell by 0.74%, despite outperforming its sector which declined by 2.71%. The stock has been on a downward trend for three consecutive sessions, losing 5.3% over this period. This decline is notable given the stock’s trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling sustained bearish momentum.
The broader market environment has also been challenging. The Sensex experienced a sharp fall of 1,026.91 points, or 1.28%, closing at 82,180.47, after a flat opening. This marked the third consecutive weekly decline for the benchmark index, which has lost 4.18% over the past three weeks. Despite this, the Sensex remains within 4.84% of its 52-week high of 86,159.02, with its 50-day moving average still above the 200-day average, indicating some underlying resilience in the broader market.
Performance Over the Past Year
Lovable Lingerie Ltd’s one-year performance has been notably weaker than the benchmark. The stock has declined by 39.12% over the last 12 months, contrasting with the Sensex’s positive return of 6.63% during the same period. The stock’s 52-week high was Rs.119.10, highlighting the extent of the recent correction.
This underperformance extends beyond the last year, with the stock consistently lagging the BSE500 index in each of the past three annual periods. Such a trend reflects ongoing challenges in maintaining competitive returns relative to the broader market and peer group.
Our latest monthly pick, this Small Cap from Oil Exploration/Refineries, is showing strong performance since announcement! See why our Investment Committee chose it after screening 50+ candidates.
- - Investment Committee approved
- - 50+ candidates screened
- - Strong post-announcement performance
Financial and Fundamental Assessment
Lovable Lingerie Ltd’s financial metrics reveal areas of concern that have contributed to the stock’s subdued performance. The company has reported operating losses, which have weakened its long-term fundamental strength. Its ability to service debt is under pressure, with an average EBIT to interest ratio of -5.20, indicating that earnings before interest and tax are insufficient to cover interest expenses.
Profitability metrics also reflect challenges. The company’s average return on equity (ROE) stands at 2.39%, signalling low profitability generated per unit of shareholders’ funds. Despite this, the company has shown some improvement in profitability over recent periods, with profits rising by 204.2% over the past year. The price/earnings to growth (PEG) ratio is 0.3, suggesting that the stock is trading at a valuation that may not fully reflect its earnings growth.
However, the stock remains classified as a Strong Sell with a Mojo Score of 17.0, downgraded from Sell on 1 April 2024. The Market Cap Grade is 4, indicating a relatively modest market capitalisation within its sector.
Sector and Industry Dynamics
Operating within the Garments & Apparels industry, Lovable Lingerie Ltd faces sector-wide pressures. The Lifestyle sector, which includes garments and apparel companies, has declined by 2.71% recently, reflecting broader headwinds such as changing consumer preferences and competitive pressures. The stock’s relative outperformance against its sector on the day of the new low suggests some resilience, but the overall sector trend remains negative.
Majority ownership remains with promoters, which can influence strategic decisions and capital allocation. The company’s latest six-month profit after tax (PAT) stood at Rs.2.66 crores, representing a growth of 285.51%, a positive development amid the broader challenges.
Is Lovable Lingerie Ltd your best bet? SwitchER suggests better alternatives across peers, market caps, and sectors. Discover stocks that could deliver more for your portfolio!
- - Better alternatives suggested
- - Cross-sector comparison
- - Portfolio optimization tool
Technical Indicators and Trading Patterns
The stock’s position below all major moving averages signals a bearish technical outlook. Trading below the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages typically indicates sustained selling pressure and a lack of short- to medium-term buying interest. This technical weakness is compounded by the stock’s recent three-day losing streak, which has accelerated the decline to the 52-week low.
Despite the recent price fall, the stock outperformed its sector on the day of the new low, suggesting some relative strength in a difficult market environment. However, the broader market’s weakness, with the Sensex down 1.28% on the same day, adds to the challenging backdrop for the stock.
Summary of Key Metrics
To summarise, Lovable Lingerie Ltd’s stock has reached Rs.72.51, its lowest level in 52 weeks, reflecting a combination of weak financial fundamentals, sector headwinds, and technical pressures. The company’s operating losses, low ROE, and poor EBIT to interest coverage ratio underpin the cautious market stance. While recent profit growth and PAT improvement offer some positive signals, the stock’s overall trajectory remains subdued.
The stock’s Mojo Grade of Strong Sell and a Mojo Score of 17.0, downgraded from Sell in April 2024, further illustrate the market’s assessment of the company’s current position. Investors and market participants will continue to monitor these developments within the context of the broader Garments & Apparels sector and overall market conditions.
Unlock special upgrade rates for a limited period. Start Saving Now →
