Campus Activewear Limited — Q4 FY26 earnings call

Call held 25 May 2026

Management summary

Campus Activewear delivered a strong Q4 and FY26 performance, marked by robust revenue growth driven by online and distribution channels, significant expansion in the sneakers portfolio, and improved profitability. Despite inflationary pressures leading to price hikes, the company maintained healthy margins and a strong balance sheet, while also focusing on brand refresh and capacity expansion.

Highlights

  • Q4 FY26 revenue grew 12.3% YoY to INR 456 crores, driven by 18.9% growth in online channel and 5.5% in distribution channel.

  • FY26 revenue grew 11.4% to INR 1,774 crores, with gross margins improving by 120 bps to 53.5%.

  • FY26 PAT margin improved by 80 bps to 8.4%, driven by higher EBITDA margins.

  • Sneakers portfolio showed strong growth of 100% YoY in FY26 and over 50% in Q4 FY26, contributing to premiumization.

  • Company maintains a strong balance sheet with Return on Capital Employed at 22.4% and Return on Equity at 18.1% as of March '26.

Concerns

  • Marginal dilution in Q4 FY26 gross margin (52.1% vs 52.3% YoY) driven by GT charges impact in online business.

  • Raw material inflation and minimum wage impact necessitated price hikes across the range.

  • Inventory days increased slightly in FY26 to correct for minimal levels in the prior year.

Key financials

3 periods

Headline

  • Return on Capital Employed
    22.4%
  • Return on Equity
    18.1%

Q4

  • Revenue
    ₹456 Cr
    YoY +12.3%
  • Online Channel Growth
    18.9%
  • Distribution Channel Growth
    5.5%
  • Volume
    6.8 million pairs
  • Average Selling Price
    ₹668
    YoY +1.5%
  • Gross Margin
    52.1%
  • EBITDA
    ₹88.5 Cr
  • EBITDA Margin
    19.2%
    YoY +0.5%
  • PAT
    ₹44.1 Cr
  • PAT Margin
    9.6%
    YoY +1%

FY26

  • Operational Revenue
    ₹1,774 Cr
    YoY +11.4%
  • Distribution Channel Growth
    10.5%
  • Online Channel Growth
    9.8%
  • Volume
    26 million pairs
  • Average Selling Price
    ₹683
    YoY +7%
  • Gross Margin
    53.5%
    YoY +1.2%
  • EBITDA
    ₹314.7 Cr
  • EBITDA Margin
    17.5%
    YoY +1.5%
  • PAT
    ₹150.1 Cr
  • PAT Margin
    8.4%
    YoY +0.8%

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue333 515 406 343 387 +16%589 +14%456 +12%385 +12%
EBITDA38 82 71 49 50 +32%110 +34%82 +15%55 +12%
Net profit14 46 35 22 20 +43%64 +39%44 +26%26 +18%
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.

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Plant routine maintenance, mold, EBO store additions, IT infra
    • Opening 30-35 COCO stores
    Last year, since it was an acquisition of Pant Nagar facility, so the CAPEX was relatively higher. But apart from that, the CAPEX would continue to be in the normal range, which is plant routine maintenance CAPEX plus regular CAPEX on mold, regular CAPEX on EBO store additions and IT infra, etc. So we will go back to the normal range and then over a period of next three years, we will be incurring CAPEX for expanding our Pant Nagar facility, including addition of assembly lines. But first, at this point in time, we will try to optimize on the utilization of the upper facility at the first place in Pant Nagar. So we don't see FY26 like CAPEX spends in FY27.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · future · Medium confidence 17% to 19%
    No guidance, unfortunately. But we will definitely endeavor to stay within the range we have guided before, 17% to 19%.

    — Nikhil Aggarwal

Capacity

  • Monthly output from Pant Nagar unit Capacity · by end of FY27 · High confidence double from approximately 2 lakhs
    these units are delivering an approximately 2 lakhs average monthly output, which is likely to double by end of FY27

    — Nikhil Aggarwal

  • Total monthly sneaker production Capacity · future · High confidence 8-9 lakh pair monthly production
    So, we are targeting in totality 8-9 lakh pair monthly production of sneakers and we are well on track to do that.

    — Uplaksh Tewary

Distribution

  • New Exclusive Brand Outlets (EBOs) Distribution · FY27 · Medium confidence 60 to 80 stores
    this year we will be back with respect to opening of new stores and we expect to open anywhere between 60 to 70 stores or about 80 stores, I would say.

    — Nikhil Aggarwal

What to watch in Q1 FY27

EBITDA Margin

Next quarter (and beyond)
Current 19.2% (Q4 FY26), 17.5% (FY26)
Target Maintain within 17-19% range

Why it matters

Key profitability metric, management aims to maintain within a specific range despite inflationary pressures.

No guidance, unfortunately. But we will definitely endeavor to stay within the range we have guided before, 17% to 19%.

Risks & concerns

  • Raw material cost inflation

    medium

    Geopolitical developments and minimum wage impact led to price hikes; management believes the peak is past and prices may start coming down.

    Management acknowledged

  • Competition from global and local brands

    medium

    Increased competition in affordable athleisure segment, but Campus believes its ecosystem provides a strong competitive advantage.

    Analyst acknowledged

  • Demand shock from price increases

    low

    Price increases across the portfolio could face resistance, but no significant demand shock observed yet, with April having a good start.

    Analyst acknowledged

Q&A highlights

6 direct, 1 evasive
Product mix shift and ASP below INR 1,000 Direct
This price is the price which the company realizes, which is our average selling price. And if you are referring to the last slide of the investor deck, and the increase or the movement between different price points, that is a reflection of the corrections in MRP which happened post the GST change.

Clarifies that the apparent shift to lower-priced shoes was due to a GST change impacting MRP, not a change in product strategy or realization.

Asked by Aditya Soman (CLSA)

Price hike amount and sufficiency for inflation Evasive
So I would not like to diverge into numbers, but there has been macro inflationary pressures with respect to raw material pricing and minimum wage impact, right, which has affected the entire industry. So proportionately we have taken price hikes across the range... No, we have taken enough increase in pricing to cover the inflationary impact. We do not see the RM impact going worse from here.

Management confirms price hikes were sufficient to cover inflation and doesn't foresee further worsening of raw material impact, crucial for margin outlook.

Asked by Gaurav Jogani (JM Financial)

Increase in other expenses vs online growth Direct
It has a couple of elements. So, you said rightly online commission. Online commission again is a dynamic negotiation between our platforms or the channel partners and at times there are waivers based on events. So that is one element. And also, if you see, as Nikhil mentioned, that our store count remained flat, which means that there was no new cost associated with EBO stores which came in this quarter. So that is also one of the reasons.

Explains why other expenses didn't grow proportionally with online revenue, attributing it to dynamic online commission waivers and flat EBO store count.

Asked by Gaurav Jogani (JM Financial)

Increase in inventory days for FY26 Direct
Last year we reached to a FG inventory level in terms of pairs or in terms of days of cover to a very, very minimal level and we had to do that correction. We were deferring that correction... So I would say that the level at which we are in terms of FG inventory, that is the right level. Going forward, it will continue to be that.

Clarifies that the increase in inventory was a deliberate correction to an optimal level after operating at minimal levels, rather than an issue of slow sales.

Asked by Aryan Garodia (Ambit Capital)

Low ASP growth in Q4 despite healthy online/offline growth Direct
It's primarily the GT charges, in fact. So, last year in the online business, let's say we were having an ASP of INR 100, but in this year or since 16th of June, the portals changed their accounting, wherein they are rather we are not billing. Instead of billing at INR 100, we are billing them at INR 82. INR 18 rupees towards freight is being billed directly by them and hence to that extent my revenue has come down and resulting into a lower ASP.

Explains the accounting change related to GT charges on online platforms, which impacted reported ASP, providing a clear reason for the lower Q4 ASP.

Asked by Sameer Gupta (IIFL)

Campus' strongest move against competition Direct
the moat of Campus is a multi-fold moat, right? We have a completely vertical and horizontally integrated supply chain vertical. We have the strongest distribution network. We have a very strong back-end R&D engineering, and we have a legacy and a brand identity and customer loyalty of over 20 years... it's a very fairly complex ecosystem that has been created with a lot of rigor and, you know, brand, of course, investment as well over the years, which is something that we don't think is very easy to replicate by anybody else very easily.

Management articulates the company's competitive advantages (moat) in detail, highlighting integrated supply chain, distribution, R&D, and brand legacy as difficult to replicate.

Asked by Mansi Joshi (SMIFS)

Impact of new brand logo and potential disruptions Direct
we actually did a soft launch of this logo in October, November last year, where the new products that were being launched in the market were all with the new logo, starting October 2025... And we have seen, like, you know, and the numbers basically tell the story, right? Like, O&D, we have had great results, and even quarter four. So that is clearly reflecting that all our NPDs that have been launched with the new logo have been very well received in the market.

Management clarifies the new logo was soft-launched earlier and has been well-received, indicating no negative disruption to sales or brand perception.

Asked by Gaurav Jogani (JM Financial)

2 min read 7 chapters

Detailed narrative

Strong Q4 and FY26 Performance

Campus Activewear reported a robust Q4 FY26, with revenue from operations growing 12.3% YoY to INR 456 crores, driven by 18.9% growth in the online channel and 5.5% in distribution. For the full year FY26, operational revenue increased 11.4% to INR 1,774 crores. Profitability also saw significant improvement, with Q4 EBITDA margin at 19.2% (up 50 bps YoY) and FY26 EBITDA margin at 17.5% (up 145 bps YoY), leading to a PAT margin of 8.4% for FY26.

Product Strategy and Premiumization

The company's ASP grew 7% YoY to INR 683 in FY26, primarily driven by strong demand for its sneaker range and a healthy product mix in women's and kids' categories. The sneakers portfolio demonstrated exceptional growth, up 100% YoY in FY26 and over 50% in Q4 FY26, reinforcing Campus's focus on democratizing design-led high-quality footwear and aligning with premiumization trends.

Channel Expansion and Mix

Campus continued to expand its reach, with distribution channel growth of 10.5% and online channel growth of 9.8% for FY26. The online channel, including platforms like Flipkart, Amazon, and Snapdeal, showed strong momentum. The company plans to open 60-80 new Exclusive Brand Outlets (EBOs) in FY27, after maintaining a steady count of 300 stores in FY26 to prioritize profitability.

Brand Identity Refresh and Marketing

During the year, Campus sharpened its brand identity with a new logo, unveiled through a successful brand meet. This refresh, reflecting a 'move your way' philosophy, aims to celebrate freedom of movement and align with the spirit of Indian youth. The new logo, soft-launched in October-November last year, has been well-received by consumers and trade partners, with the company planning an aggressive marketing budget for FY27 to continue investing in brand building.

Manufacturing and Capacity Expansion

Campus's integrated manufacturing ecosystem, with an accelerated time-to-market of 80-100 days, supports rapid new product introductions. The upper manufacturing facilities at Paonta Sahib and Pant Nagar are currently delivering approximately 2 lakh pairs of monthly output, which is targeted to double by the end of FY27. The company aims for a total monthly sneaker production of 8-9 lakh pairs, indicating no current capacity constraints.

Margins and Cost Management

Gross margins improved by 120 bps to 53.5% in FY26, driven by product and channel mix. Despite raw material inflation and minimum wage impacts, the company took timely calibrated price actions across its range to safeguard margins. Management believes the peak of raw material inflation is past and expects prices to stabilize or decline in the coming quarter, which should further benefit margins.

Market Dynamics and Competition

In a dynamic market with evolving geopolitical developments and inflationary pressures, Campus believes it has gained market share, growing at 11.4% (FY26) compared to an estimated industry growth of 7-8%. The company attributes its competitive advantage to a multi-fold moat including a vertical and horizontally integrated supply chain, strong distribution network, R&D, and established brand identity, which are difficult for competitors to replicate.

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