Summary
Campus Activewear Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026, 4:00 PM IST
Event Participants
Executives 3 Nikhil Aggarwal (Whole-Time Director and CEO), Sanjay Chhabra (CFO), Uplaksh Tewary (CBO)
Analysts 8 Ali Asgar Shakir (Motilal Oswal), Ankit Kedia (Phillip Capital), Devanshu Bansal (Emkay Global), Gaurav Jogani (JM Financial), Rehan Syed (Trinetra Asset Managers), Resham Jain (VVT Asset Managers), Sameer Gupta (India Infoline), Tejash Shah (Avendus Spark), Umang Mehta (Kotak Securities), Videesha Sheth (Ambit Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹589 crores | +14.3% YoY, driven by 18% growth in online channels and 9% in distribution. |
| Sales Volume | 8.3 million pairs | Strong demand during festive season and expansion of the Sneaker portfolio. |
| Average Selling Price (ASP) | ₹711 | +5.2% YoY, aided by premiumization and higher saliency of premium SKUs. |
| Gross Margin | 53.1% | +190 bps YoY, benefited by higher Sneaker mix and marketplace accounting shifts. |
| EBITDA | ₹115.8 crores | +34% YoY approximately; margin improved 290 bps to 19.5% on fixed cost leverage. |
| PAT | ₹63.7 crores | +37% YoY; margin expanded to 10.7% (+175 bps YoY) due to operational efficiencies. |
| ROCE | 20.0% | Reflects disciplined capital management as of December 2025. |
| ROE | 17.6% | Consistent return profile maintained alongside capacity expansion. |
Geographic & Segment Commentary
- Northern Region: Revenue mix increased from ~40% to 47% YoY. Management attributed this to state-specific distribution strategies and strong product-channel alignment rather than reduced competition.
- Women’s & Kids Category: Contribution to revenue mix improved to 22% from 18.7% YoY. The “You Go, Girl” marketing campaign featuring Kriti Sanon significantly boosted female consumer adoption.
- Sneaker Portfolio: Category volumes nearly doubled YoY with an ASP of ₹900-₹910. The segment is a key driver for overall premiumization, with realizations correlating to MRPs in the ₹1,700-₹1,800 range.
Company-Specific & Strategic Commentary
- Athleisure Apparel Launch: Strategic entry into apparel in January 2026 to enhance store productivity and wallet share. The pilot is live in 60 EBOs and major e-commerce platforms (Amazon, Myntra).
- Manufacturing Integration: The Poanta Sahib facility has stabilized, and the Pant Nagar facility commenced commercial production of premium uppers in January 2026. 90% of raw materials are now sourced locally.
- Omnichannel Pivot: Transitioned nearly 80% of online business to a marketplace model (from outright), giving the company better control over inventory and pricing.
- EBO Rationalization: Management is focusing on unit economics over aggressive expansion; the store count remained static as non-profitable outlets were closed while others were optimized for apparel.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Sustainable Double-digit | Management expresses high confidence in sustaining growth through category diversification (Sneakers/Women). |
| Gross Margins | Improvement vs FY25 | Target is to exceed previous year levels, though Q4 may see seasonal pressure from open footwear mix. |
| Capacity | Sufficient for mid-term | Recent investments in Pant Nagar provide enough head-room for domestic and potential export demand. |
Risks & Constraints
| Risk | Context |
|---|---|
| Demand Volatility | Management noted that general industry demand hasn’t recovered as anticipated despite GST cuts. Growth is currently dependent on successful category diversification. |
| Seasonality | Q4 typically shifts toward lower-margin open footwear (sandals/flip-flops), which may impact blended ASP and gross margins. |
| Inverted Duty Structure | Evaluation of the impact on GST refunds for raw materials is ongoing with state governments; potential for working capital drag if unresolved. |
Q&A Highlights
Online Channel Performance
- Question: What is driving the 18% online growth despite early festivities? (Umang Mehta)
- Answer: The pivot to a marketplace model on platforms like Amazon has been the strongest driver, providing better control over input metrics and marketplace operations (Uplaksh Tewary).
GST & Pricing Dynamics
- Question: Did the GST cut from 18% to 5% lead to channel upstocking or massive price cuts? (Sameer Gupta)
- Answer: No upstocking was observed as inventory remains at a healthy 84 days. MRPs were reduced by 5%-6% at the consumer level, but net realizations (ASP) rose due to a better product mix (Sanjay Chhabra).
Apparel Strategy
- Question: How does the company plan to compete in the crowded Athleisure space? (Devanshu Bansal)
- Answer: Leveraging brand equity in Tier 2/3 cities where Campus is dominant. The focus is on offering high-quality, fashion-forward products at reasonable price points (Nikhil Aggarwal).
Sustainability of Growth
- Question: Why is Campus outperforming peers who are struggling with growth? (Aliasgar Shakir)
- Answer: It is a culmination of a 2-year cycle in product development, specifically aggressive expansion in Sneakers/Women’s categories and reaching a record 29,000 retail touchpoints (Nikhil Aggarwal).
Key Takeaway
Campus Activewear delivered a robust Q3 FY26, characterized by 14.3% revenue growth and a significant 37% surge in PAT. The performance was anchored by a deliberate shift toward premiumization, with the Sneaker portfolio doubling in volume and the Women’s category mix rising to 22% following successful brand campaigns. Strategically, the company has completed its pivot to a marketplace model for online sales (accounting for ~80% of e-commerce) and launched its Athleisure apparel line to optimize EBO unit economics. While the broader footwear industry faces sluggish demand, Campus utilized its integrated manufacturing and expanded distribution network (29,000 touchpoints) to gain share. Management remains focused on margin expansion through product mix despite seasonal headwinds in Q4, positioning the brand to transition from a footwear player to a comprehensive lifestyle entity.
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