LWS Knitwear Gains 1.40%: Downgrade and Q3 Profit Surge Shape the Week

Monday, 09 February 2026: Downgrade to Strong Sell Shakes Market Sentiment

On the first trading day of the week, LWS Knitwear Ltd faced a significant setback as MarketsMOJO downgraded the stock from 'Sell' to 'Strong Sell'. This downgrade was driven by deteriorating technical indicators and persistent fundamental weaknesses, including a modest average ROCE of 7.21%, a high Debt to EBITDA ratio of 5.96 times, and sluggish operational efficiency with a Debtors Turnover Ratio of 2.47 times. Despite an attractive valuation with an Enterprise Value to Capital Employed ratio of 0.8, the downgrade reflected concerns over the company’s ability to sustain profitability and manage leverage.

The stock reacted negatively, closing at Rs.15.55, down 0.83% from the previous close of Rs.15.68. Intraday volatility was notable, with prices ranging between Rs.15.31 and Rs.16.50. The technical outlook was predominantly bearish, with daily moving averages and Bollinger Bands signalling downward momentum, while monthly MACD and KST indicators also pointed to weakening trends.

Tuesday, 10 February 2026: Price Rebounds Despite Negative Outlook

Contrary to the previous day’s decline, LWS Knitwear’s stock rebounded strongly on 10 February, gaining 2.89% to close at Rs.16.00. This recovery occurred despite the lingering impact of the downgrade and reflected some short-term buying interest, possibly driven by the stock’s attractive valuation metrics relative to peers. The Sensex also advanced modestly by 0.25%, closing at 37,207.34, but LWS Knitwear’s outperformance was notable given the negative sentiment surrounding the company.

Volume on this day was relatively low at 1,144 shares, indicating cautious participation. The rebound, however, did not alter the broader technical concerns, as the stock remained below key resistance levels and within a bearish trend channel.

Wednesday, 11 February 2026: Profit Taking and Technical Pressure

The stock corrected on 11 February, declining 2.25% to close at Rs.15.64 amid profit-taking and persistent technical weakness. The Sensex continued its modest upward trajectory, gaining 0.13% to 37,256.72, highlighting the stock’s relative underperformance on the day. Trading volume increased slightly to 1,356 shares, suggesting some investor caution following the prior day’s rebound.

This decline reinforced the bearish technical signals, with the stock failing to sustain gains above Rs.16.00 and remaining under pressure from moving averages and Bollinger Bands. The downgrade’s implications continued to weigh on sentiment, limiting upside momentum.

Thursday, 12 February 2026: Q3 FY26 Results Reveal Profit Surge Amid Revenue Volatility

LWS Knitwear released its Q3 FY26 results on 12 February, reporting a notable surge in profits that contrasted with concerns over revenue volatility. While the profit increase was a positive surprise, the underlying revenue fluctuations raised questions about the sustainability of earnings growth. The market responded positively, with the stock gaining 2.88% to close at Rs.16.09, its highest level of the week.

However, trading volume was thin at just 277 shares, indicating limited conviction behind the rally. The Sensex declined 0.56% to 37,049.40, underscoring the stock’s relative strength on the day. Technical indicators remained mixed, with weekly MACD mildly bullish but monthly trends still bearish, reflecting ongoing uncertainty.

Friday, 13 February 2026: Week Ends with Modest Gain Amid Market Weakness

The week concluded with LWS Knitwear closing at Rs.15.90, down 1.18% on the day but up 1.40% for the week overall. The Sensex fell sharply by 1.40% to 36,532.48, marking a weak finish to the trading week. Volume increased to 1,506 shares, reflecting renewed investor activity as the market digested the week’s developments.

The stock’s ability to outperform the Sensex despite mixed news and a bearish technical backdrop highlights a degree of resilience. However, the negative daily close on Friday suggests ongoing volatility and uncertainty as investors weigh the company’s fundamental challenges against its recent profit growth.

Key Takeaways

Positive Signals: Despite the downgrade and fundamental concerns, LWS Knitwear managed to outperform the Sensex by 1.94% over the week, closing higher at Rs.15.90. The Q3 FY26 profit surge provided a welcome boost, demonstrating some operational strength amid revenue volatility. The stock’s attractive valuation metrics, including a trailing ROCE of 10.8% and an EV/Capital Employed ratio of 0.8, continue to offer potential value relative to peers.

Cautionary Signals: The downgrade to Strong Sell reflects significant risks from weak long-term fundamentals, including high leverage with a Debt to EBITDA ratio near 6 times and sluggish debtor turnover. Technical indicators remain predominantly bearish, with daily and monthly moving averages signalling downward momentum. Revenue volatility highlighted in the Q3 results raises questions about earnings sustainability. The stock’s recent negative returns over one year (-22.49%) and underperformance relative to sector benchmarks underscore ongoing challenges.

Conclusion

LWS Knitwear Ltd’s week was defined by a stark contrast between fundamental caution and short-term resilience. The downgrade to Strong Sell on 09 February underscored deteriorating financial health and technical weakness, yet the stock’s ability to post a 1.40% weekly gain and outperform the Sensex suggests pockets of investor interest remain. The Q3 FY26 results, while showing a profit surge, also revealed revenue volatility that tempers optimism. Going forward, the stock’s trajectory will likely hinge on its ability to stabilise revenue streams and improve operational efficiency amid a challenging market environment. Investors should remain vigilant to both the risks and the valuation appeal as the company navigates these headwinds.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →