Concall AI

Campus Activewear Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

Campus Activewear reported a strong Q3 FY26, with revenue growing 14.3% and PAT up 37% YoY, driven by distribution expansion, product mix enhancement, and a robust festive season. The company saw significant margin expansion and doubled its Sneaker portfolio volume. Strategic initiatives include the launch of Athleisure apparel and stabilization of manufacturing facilities, though overall industry demand remains below expectations.

Highlights

Revenue surged by 14.3% Y-o-Y to INR 589 crores, driven by widening distribution and strengthening product mix.
Profit after tax grew by 37% Y-o-Y to INR 63.7 crores, owing to sustained growth across channels.
EBITDA margin stood at 19.5%, an improvement of 290 basis points versus last year, aided by seasonality and execution-led higher sales.
Average Selling Price (ASP) rose by 5.2% Y-o-Y to INR 711, supported by higher saliency of premium SKUs and refreshed collections.
The Sneaker portfolio doubled in volume, and the company strategically ventured into Athleisure apparel in January 2026.

Concerns

Industry demand has not picked up as much as anticipated, with management noting it's 'still not as per what the industry is expected'.

Key financials

01 Revenue ₹589 Cr +14.3%YoY
02 PAT ₹63.7 Cr +37%YoY
03 EBITDA ₹115.8 Cr
04 EBITDA Margin 19.5%
05 PAT Margin 10.7%
06 Average Selling Price (ASP) ₹711 +5.2%YoY
07 Volume 8.3 million pairs
08 Gross Margins 53.1%
09 Return on Capital Employed 20%
10 Return on Equity 17.6%

What they filed

Q1 FY27: revenue up 12.2%, net profit up 18.2% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	333	515	406	343	387 +16%	589 +14%	456 +12%	385 +12%
Expenses	295	433	334	294	337	478	373	331
EBITDA	38	82	71	49	50 +32%	110 +34%	82 +15%	55 +12%
Margin	11%	16%	18%	14%	13%	19%	18%	14%
Other income	3	4	5	6	5	6	6	8
Interest	4	4	6	5	6	7	6	5
Depreciation	18	19	23	20	22	22	24	23
Profit before tax	20	63	48	30	27 +35%	86 +37%	59 +23%	35 +17%
Tax rate	27%	26%	26%	27%	26%	26%	25%	26%
Net profit	14	46	35	22	20 +43%	64 +39%	44 +26%	26 +18%
EPS	0.47	1.52	1.15	0.73	0.66	2.08	1.44	0.86

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

What to watch in Q4 FY26

Athleisure apparel performance

next quarter

Current Launched in January 2026, pilot encouraging, summer collection expected to perform better.

Target Continued strong response and contribution to revenue.

Why it matters

This is a new category expansion expected to broaden the addressable market and unlock incremental revenue.

As a natural progression of our brand, we have strategically ventured into Athleisure apparel in January 2026... The pilot so far has been very encouraging and also currently the mix that we have launched in this is more towards summer apparels.

Risks & concerns

Overall industry demand weakness
medium

Demand has improved but is still not as per industry expectations, requiring new categories to drive growth.

Management acknowledged
Inverted duty structure
low

The company is still evaluating the impact and has started filing refunds with state governments for raw materials.

Management acknowledged

Q&A highlights

7 direct

Sustainability of double-digit growth and underlying levers Partial

The core reason for this, of course, is the strength of our distribution and the execution process, back with a very strong product story on the lines of Sneakers, as well as the women's story... on the forward-looking, I don't think we will be able to give any specifics on the guidance.

Analyst sought clarity on the drivers of recent strong growth and whether it can be sustained, to which management provided drivers but no specific forward guidance.

Asked by Videesha Sheth

Impact of GST price cut on ASP and revenue mix Direct

GST never gets added to my sales revenue and hence will not impact my ASP. The 5% increase in my ASP during the quarter is primarily driven by improvement in mix... So the GST has nothing to do with my ASP because that is never part of my sales revenue.

Clarified that GST changes do not directly impact ASP calculation, and ASP growth is due to product and channel mix, particularly premiumization.

Asked by Ankit Kedia

Strategy for Athleisure apparel category and competition Direct

this is part of a strategy in terms of leveraging the brand equity that you have created over the years... we are very strong in the Tier 2 and 3 markets and now Tier 1 as well... high quality at very reasonable pricing... the pilot so far has been very encouraging.

Addressed how Campus plans to compete in the Athleisure segment, leveraging its brand equity, market presence, and value proposition despite MNC competition.

Asked by Devanshu Bansal

Demand environment post GST cut and role of new categories Direct

demand has improved to the extent that it normally does a little bit better... But I would say it may improve further going forward because it is still not as per what the industry is expected... ancillary categories that have helped us overcome this demand.

Provided an honest assessment of the industry demand, indicating it's still soft, and highlighted how new categories like sneakers and women's wear are crucial for growth.

Asked by Devanshu Bansal

Online channel growth and shift to market-based model Direct

we started pivoting our business from an outside based model to a market based model... we have been able to deliver extremely good performance in certain accounts like Amazon... the pivot from outright to a marketplace business has been the strongest in this channel.

Explained the strategic shift in the online business model and its positive impact on growth, particularly with key e-commerce partners.

Asked by Gaurav Jogani

EBO (Exclusive Brand Outlet) strategy and focus on profitability Direct

the focus for us is on profitability first. We are focusing a lot on profitability and opening stores very judiciously... apparel is a big part of that as it will add to incremental revenues on a per square feet basis.

Clarified the company's current EBO strategy, prioritizing profitability and unit economics over aggressive expansion, with apparel expected to boost store productivity.

Asked by Resham Jain

Role of brand ambassador Kriti Sanon in women's category growth Direct

we think she resonates very well with the long-term brand building aspiration that we have. And she has significantly contributed. The campaign has done incredibly well... women category, as you know, has grown by almost 40%.

Management defended the choice of brand ambassador, attributing significant contribution to the strong growth in the women's category.

Asked by Ankit Kedia

Replenishment model and inventory management Direct

we are trying to move as close to the made-to-order model... We use basically a secondary tracking mechanism to be able to drive our business objectives... We take extra efforts to get input from the market through the EBOs, be it online or via the general trade or retailer network and create orders or products according to that.

Provided detailed insight into the company's inventory and order fulfillment strategy, emphasizing a data-driven, market-responsive replenishment model.

Asked by Rehan Syed

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

Campus Activewear reported a strong Q3 FY26, with operational revenue growing by 14.3% Y-o-Y to INR 589 crores. Profit after tax surged by 37% Y-o-Y to INR 63.7 crores. The company sold approximately 8.3 million pairs during the quarter, with a healthy PAT margin of 10.7%, an improvement of 175 basis points versus last year. The balance sheet remains robust with a Return on Capital Employed of 20% and Return on Equity of 17.6% as of December 25.

Product Strategy and Premiumization

The company's ASP increased by 5.2% Y-o-Y to INR 711, driven by a focus on strengthening its product mix and higher saliency of premium SKUs. The Sneaker portfolio, a premium category with an ASP contribution of INR 900-910, doubled in volume, indicating strong consumer adoption. Gross margins improved to 53.1% in Q3 FY26 from 51.2% last year, primarily due to a higher Sneaker mix and other operating revenues.

Manufacturing and Sourcing

The Poanta Sahib facility, focusing on upper manufacturing, has fully stabilized. Commercial production of premium uppers also commenced at the Pant Nagar facility in January 2026, enhancing integrated manufacturing capabilities. Over 90% of raw materials are sourced locally, and all assembly is conducted in-house, ensuring compliance and strategic independence within a BIS-regulated environment. The company stated it is well-equipped for future capacity needs and does not require further investment at this time.

New Category Expansion (Athleisure)

Campus Activewear strategically ventured into Athleisure apparel in January 2026. This expansion aims to broaden the addressable market, unlock incremental revenue opportunities, and enhance store productivity. The initial launch is through approximately 60 EBOs, brand.com, Myntra, and Amazon. The pilot results have been very encouraging, with summer apparel collections expected to perform even better.

Distribution and Online Channel Strategy

The company's distribution efforts, coupled with a strong product story, were key drivers of growth. Online channels grew by around 18%, benefiting from a pivot to a market-based model, which provides stronger control and levers. The company has also launched a newer format of super stockists in general trade, leading to a slight reduction in directly mapped distributors. Inventory with channel partners remains healthy at 84 days, within the 80-90 day norm, indicating no channel upstocking.

Margin Performance and Cost Management

EBITDA margin expanded by 290 basis points to 19.5%, and PAT margin improved by 175 basis points to 10.7%. This improvement was attributed to seasonality, execution-led higher sales, and efficient leveraging of fixed costs. The company is focusing on consistent phasing of production and optimizing costs to mitigate inflation, contributing to leverage benefits reflected in the numbers. Ad spends were higher this quarter due to TV and digital campaigns, but remained within the planned budget.

Industry Demand Environment

While Campus Activewear demonstrated strong growth, management noted that overall industry demand has not picked up as much as anticipated, even after the GST cut. The company's growth was significantly aided by its focus on ancillary categories like sneakers and women's wear, which helped overcome market stagnation. The GST benefit is expected to provide a tailwind to overall industry demand going forward.

This is an AI-generated summary of a publicly available earnings call transcript.

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