Monte Carlo Fashions Declines 4.45%: Technical Shifts and Fundamental Pressures Shape Week

23 February 2026: Upgrade to Sell Rating Amid Technical Improvements

On Monday, Monte Carlo Fashions Ltd opened the week at ₹575.75, closing lower at ₹575.75 with a 1.16% decline from the previous Friday’s close of ₹582.50. Despite the price drop, MarketsMOJO upgraded the stock’s rating from Strong Sell to Sell on 20 February, citing modest technical improvements. The Mojo Score improved to 31.0, reflecting a shift from bearish to mildly bearish technical indicators.

Technical analysis showed a mixed picture: the monthly Moving Average Convergence Divergence (MACD) turned mildly bullish, and the monthly Relative Strength Index (RSI) was also bullish, suggesting improving momentum over the longer term. However, weekly MACD and daily moving averages remained bearish, indicating short-term caution. The On-Balance Volume (OBV) was mildly bullish on the weekly chart, hinting at some accumulation despite the price decline.

Fundamentally, the company continued to face challenges with flat financial performance and high leverage. Operating profits have declined at a CAGR of -5.53% over five years, and the debt to EBITDA ratio stood at 2.82 times. The stock traded within a 52-week range of ₹507.40 to ₹865.00, with the recent price closer to the lower end.

24 February 2026: Bearish Momentum Amid Mixed Technical Signals

Tuesday saw the stock decline further to ₹569.00, down 1.17% on the day, while the Sensex fell 0.78%. The technical momentum deteriorated, with key indicators shifting from mildly bearish to outright bearish. Both weekly and monthly MACD readings remained bearish, and the Know Sure Thing (KST) indicator confirmed the downtrend. Daily moving averages stayed firmly bearish, with the stock trading below its 50-day and 200-day averages.

Interestingly, the RSI on weekly and monthly charts remained bullish, suggesting potential short-term relief rallies or oversold conditions. Bollinger Bands indicated bearish pressure, with price action hugging the lower band. Volume indicators such as OBV showed no clear trend, and Dow Theory analysis revealed no definitive trend, signalling market indecision.

Monte Carlo Fashions’ year-to-date decline of 10.28% contrasted with the Sensex’s smaller fall of 2.26%, highlighting the stock’s underperformance amid sectoral headwinds in garments and apparels.

25 February 2026: Technical Indicators Deteriorate, Downgrade to Strong Sell

On Wednesday, the stock price stabilised slightly, closing at ₹569.25, up 0.04%, while the Sensex gained 0.41%. However, the technical landscape worsened, prompting MarketsMOJO to downgrade Monte Carlo Fashions from Sell to Strong Sell on 25 February. The Mojo Score dropped to 26.0, reflecting heightened caution amid deteriorating momentum and fundamental weaknesses.

Both weekly and monthly MACD and KST indicators turned bearish, confirming sustained downward momentum. Daily moving averages remained bearish, and Bollinger Bands suggested increased volatility with bearish bias. Despite the RSI retaining a bullish stance on weekly and monthly charts, it was insufficient to offset the negative trend.

Financially, the company’s operating profit growth remained negative, with a five-year CAGR of -5.53%. The debt-equity ratio rose to 0.89 times, and interest expenses surged by 23.62% to ₹28.05 crores in the latest six months. The stock’s valuation remained attractive, trading at an enterprise value to capital employed ratio of 1.2 and a PEG ratio of 0.4, alongside a dividend yield of 3.7%. Yet, these positives were overshadowed by consistent underperformance against benchmarks and weak quality metrics.

26 February 2026: Continued Downtrend Amid Weak Market Sentiment

Thursday saw the stock rebound modestly to ₹574.20, a 0.87% gain, while the Sensex rose 0.19%. This slight recovery was supported by mild bullish signals in monthly momentum indicators, but the overall technical grade remained bearish. Volume was moderate at 202 lakh shares, reflecting cautious trading activity.

The stock’s short-term moving averages continued to act as resistance, and the broader garments and apparels sector remained under pressure due to supply chain disruptions and fluctuating raw material costs. The company’s lack of institutional ownership, with zero domestic mutual fund holdings, further highlighted investor scepticism.

27 February 2026: Week Closes with Sharp Decline Amid Market Weakness

Friday closed the week on a negative note, with Monte Carlo Fashions dropping 3.07% to ₹556.55 on heavy volume of 721 lakh shares. The Sensex also declined 1.16%, closing at 36,322.56. The stock’s weekly decline of 4.45% significantly outpaced the Sensex’s 0.96% fall, underscoring the stock’s relative weakness.

The downgrade to Strong Sell and deteriorating technical indicators weighed heavily on sentiment. The stock remains near its 52-week low of ₹507.40, far below its 52-week high of ₹865.00. Despite attractive valuation metrics and a dividend yield of 3.7%, the persistent fundamental challenges and lack of institutional support continue to limit upside potential.

Key Takeaways

Technical Signals: The week saw a downgrade from Sell to Strong Sell as bearish momentum intensified. While monthly MACD and RSI showed some mild bullishness earlier in the week, the dominant trend was negative with daily moving averages and KST indicators confirming sustained selling pressure.

Fundamental Challenges: Persistent flat financial performance, high leverage with a Debt to EBITDA ratio of 2.82, and rising interest expenses continue to weigh on the company’s outlook. The lack of domestic mutual fund holdings highlights institutional scepticism.

Valuation and Dividend: Despite the challenges, valuation metrics remain attractive with an EV to capital employed ratio of 1.2 and a PEG ratio of 0.4. The dividend yield of 3.7% offers some income appeal, though this has not translated into price strength.

Market Performance: Monte Carlo Fashions underperformed the Sensex significantly, falling 4.45% versus the benchmark’s 0.96% decline. The stock remains near its 52-week low, reflecting ongoing investor caution amid sectoral headwinds.

Conclusion

Monte Carlo Fashions Ltd’s week was characterised by a clear deterioration in technical momentum and persistent fundamental weaknesses. The downgrade to Strong Sell by MarketsMOJO reflects heightened caution amid flat financial trends, high leverage, and consistent underperformance relative to the Sensex. While valuation and dividend yield offer some positives, these are insufficient to offset the risks posed by bearish technical indicators and weak operational metrics. Investors should remain vigilant and monitor for any signs of sustained technical recovery before considering exposure to this stock.

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