Campus Activewear Q1 FY27: Revenue Up 12.2%, PAT Grows 17.7%
Campus Activewear reported Q1 FY27 results with 12.2% revenue growth and 17.7% PAT growth. The company implemented an 8% MRP increase, with underlying ASP up 5%. Despite headwinds, EBITDA margins were stable at 15.9%. Management is confident in achieving full-year EBITDA margins of 17-19% and targets 80-120 store openings in FY27.
The announcement details significant revenue and profit growth, strategic initiatives like new product launches and brand refresh, and provides a clear outlook for the fiscal year, including store expansion plans. These are material factors for investors.
The company reported strong revenue and PAT growth, stable margins, and expressed confidence in future performance despite navigating challenging market conditions. The strategic initiatives and positive outlook contribute to a positive sentiment.
Campus Activewear Limited reported a strong start to FY'27 for its first quarter, with revenue growth of 12.2% and volume growth of 11.7%. EBITDA margins remained stable at 15.9%, and profit after tax (PAT) saw a significant increase of 17.7%. The company navigated a challenging operating environment characterized by geopolitical uncertainties, supply chain volatility, and inflationary pressures on raw materials. Additionally, Campus Activewear absorbed increased labor costs due to minimum wage revisions and approximately ₹2.5 crore in additional depreciation from new manufacturing facilities.
The company implemented MRP increases of approximately 8% across key product categories, leading to an underlying Average Selling Price (ASP) increase of around 5% in its core Stuck-On category. This was partially offset by a revised accounting treatment for its Walmart businesses (Flipkart and Myntra), which suppressed ASP by approximately 2.5%, and a substantial 50% year-on-year revenue growth in the school shoes segment, which has a lower ASP. These temporary factors are expected to normalize from Q2 onwards, allowing the full benefits of pricing initiatives to reflect in ASP and margins.
Operational highlights include the highest ever Q1 production, continued momentum into July, and proactive inventory building for the festive season. The company also launched 'Elan by Campus' to enter the neo-casual footwear segment, unveiled a new logo, and conducted a large distributor meet that yielded record orders. The company remains confident in India's branded footwear market growth, supported by its brand, distribution, innovation, and manufacturing capabilities.
During the earnings call, management addressed questions regarding price hikes, volume growth drivers, and the performance of specific categories like sneakers and school shoes. The company reiterated its confidence in achieving full-year EBITDA margins of 17-19%. Investments in other expenses were attributed to minimum wage increases, marketing initiatives like the distributor meet and logo launch, and indirect costs from new plants. The company is targeting 80-120 store openings for FY'27, with a focus on pan-India expansion across Tier-1, Tier-2, and Tier-3 cities. The new logo, launched in May, aims to connect with a younger audience and has been positively received.
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Campus Activewear Limited filed this with the NSE as a statutory disclosure, categorised under quarterly results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Campus Activewear Limited. Read the original for the full detail.