Campus Activewear Ltd (NSE: CAMPUS) Q3 2025 Earnings Call dated Feb. 11, 2025
Corporate Participants:
Nikhil Aggarwal — Chief Executive Officer and Whole-Time Director
Sanjay Chhabra — Chief Financial Officer and Chief Risk Officer
Analysts:
Gaurav Jogani — Analyst
Videesha Sheth — Analyst
Priyank Chheda — Analyst
Prerna Jhunjhunwala — Analyst
Umang Mehta — Analyst
Devanshu Bansal — Analyst
Aliasgar Shakir — Analyst
Resha Mehta — Analyst
Aditya Khetan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Campus Activewear Limited Q3 and Nine Months FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then on your touchstone phone. Before we proceed on this call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that could cause future results, performance or achievements to differ significantly from what is expressed or implied by such forward-looking statements. The Campus management team is represented by Mr Nikhil Agarwal, Director and CEO; and Mr Sanjay Chabla, CFO. I now hand the conference over to Mr Nikhil Agarwal, Director and CEO for his opening remarks. Thank you, and over to you, sir.
Nikhil Aggarwal — Chief Executive Officer and Whole-Time Director
Thank you. Thank you. Good evening, everyone. We appreciate your presence at our quarter three and nine months FY ’25 earnings call today. The company continued its growth momentum displayed in-quarter two FY ’25. We achieved the highest-ever quarterly revenues of INR514.8 crores, largely attributed to our aggressive distribution drive strategy and our higher online sales benefiting from the festive season, thereby navigating a challenging macro-environment. Our revenue surged by 9.1% Y-o-Y in-quarter three FY ’24, led by a strategic focus towards multiple initiatives for gaining market-share, like reach expansion in our key markets, a 116% growth in our cheap sneaker category and the new multimedia marketing campaign amongst many others. The company has registered double-digit growth in key states in North, Central and West. Additionally, we have made a swift foray into the focus southern markets through scaling up our online presence.
First, we have strengthened our product portfolio by launching 69 new articles during the quarter and new SKUs for women category, resulting in an improved product mix caping the diverse needs of the Indian families for every occasion. During the
Operator
Quarter, we have added six new stores across India, taking our total EBO count to 290. We have embarked our presence on Zepto during the end-of-the quarter, thereby satiating our customers’ presence with delivery convenience through quick commerce, and our brand is also getting traction in premium large-format stores across the country. Our gross margin for the quarter stands at 51.2%, marginally lower as against 51.4% in-quarter three FY ’24 versus quarter two FY ’24, owing to the raw-material price inflation. The EBITDA margin has expanded by 440 bps Y-o-Y from 12.2% to 16.6%, primarily due to improvement in better and inventory health, which is basically lower provisioning, reflecting better working capital management. Campus Activewear paused a profound and enduring engagement with its core demographic through a 360 degree Move Your Way campaign from prominently showcasing our brand advisor Wiki Caution to resonate and captivate the market. During the quarter, we reached out to all our consumers through a multimedia strategy, including TV, digital media, print, outdoor and visual merchandising campaigns. We would like to share key updates in our capital expenditure journey as well. The capex for the sole manufacturing unit at our facility was completed in Q3 FY ’25. Furthermore, we anticipate the completion of our facility dedicated for manufacturing state-of-the-art upwards in Q4 FY ’25 with commercial production projected to commence from March 2025. We persist in our endeavor to maintain a competitive edge through our data-driven strategy that allows us to actively track and adapt to evolving consumer trends, preferences and pricing dynamics, ensuring our product portfolio is consistently attuned to-market needs. Thank you. And now I hand over the call to our CFO, Mr Sanjay, to take you through more details on the quarter three and Nine-Month FY ’25 performance. Thank you. Thank you,. Good evening, everyone, and thank you for joining us for quarter three FY ’25 earnings call of Campus Act as well. Our revenue from operations grew by 9.1% year-on-year to INR515 crores in-quarter three FY ’25, largely benefited by higher distribution, which registered a growth of around 9% and online channel, which showed a revenue growth of around 11%. The company sold approximate approximately 7.6 million pairs in Q3 FY ’25, up 10% year-on-year. The average selling price stood at around INR675 in-quarter three FY ’25, a drop of 1% year-on-year, driven by higher saliency of accessories and socks. Footwear ASP remained flat at INR683 per share. Our gross margin for the quarter was at 51.2% versus 51.4% in-quarter three FY ’24, showing a drop of 20 bps, marginally lower, driven by raw-material price increases. On a quarter-on-quarter basis also, our gross margin dropped by 140 basis-points, driven by raw-material price increase, adverse mix and liquidation of non-moving DIS inventory. The revenue mix between men and women and children categories stood at 81.3% and 18.8% in-quarter three versus 80% and 20% in-quarter three FY ’24, driven by higher sales of sneakers in men category. Our EBITDA for quarter three FY ’25 was at 85.9 crores. The EBITDA margin expanded by 440 bps year-on-year to 16.6% and owing to a normalized SG&A. So last year we had a couple of provisioning towards inventory and doubtful debts. So current EBITDA margin is at a normalized level. PAT grew by 86.2% year-on-year to INR46.5 crores and PAT margins expanded by 370 bps year-on-year to 9%. Our balance sheet continues to demonstrate strength with robust return ratios such as return on capital employed at 22.1% and return-on-equity at 17.5% as of 31st December. With this summary, I will now conclude my remarks and open the floor to the moderator for Q&A session. Thank you. Thank you very much. We will now begin the question-and-answer session. For anyone who wishes to ask a question may press star and one on their touchtone telephone if you wish to withdraw yourself from the question queue, you may press star and 1 again. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of from JM Financial. Please go-ahead. Morning thank you for taking my question, sir. Sir, my question is with regards to the gross margin decline. I mean, we can see the gross margin being declining both up sequentially as well as on a Y-o-Y basis. So if you can highlight which particular RM did you see inflation and what are the steps we are taking to mitigate this? Also, if you can quantify the impact of the liquidation of the non-BS move — the non-moving BS inventory on the RM and the advanced mix that you’ve. Thanks, hi, good evening, Gaurav. Just to highlight one more number here. On a YTD basis for nine months, the overall gross margin drop is just 50 bps. We have been seeing the input price increase below the cartons, wherein we had to take a — or rather we had to give a price increase to our suppliers in the last quarter, back-end of last quarter. This quarter we saw the one of the component called TPU price increase primarily due to counterwelling duty imports — custom duty imports. It was a conscious call on our behalf not to pass-on the prices to consumers, but we have taken selective price increases in November and also in Jan beginning, as we see that we’ll be able to mitigate part of this price increase or pass-on this price increase to the consumers in the last quarter. For every occasion during the quarter we have added six new stores across India taking our total edo count to 290. We have embarked our presence on Zepto during the end of the quarter thereby satiating our customers preference with prompt delivery convenience through quick commerce and our brand is also getting traction in premium large format stores across the country. Our gross margin for the quarter stands at 51.2%, marginally lower as against 51.4% in quarter three FY24 versus quarter two FY24 owing to the raw material price inflation, the EBITDA margin has expanded by 440bps YoY from 12.2% to 16.6% primarily due to improvement in debtors and inventory health which is basically lower provisioning reflecting better working capital management. Campus Activewear forged a profound and enduring engagement with its core demographic through a 360 degree move youe way campaign from prominently showcasing our brand ambassador Vicky Kaushal to resonate and captivate the market during the quarter, we reached out to all our consumers through a multimedia strategy including tv, digital media, print, outdoor and visual merchandising campaigns. We would like to share key updates in our capital expenditure journey as well. The CAPEX for the sole manufacturing unit at our Ghannau facility was completed in Q3 FY25. Furthermore, we anticipate the completion of our Harizwa facility dedicated for manufacturing state of the art uppers in Q4FY25 with commercial production projected to commence from March 2025. We persist in our endeavor to maintain a competitive edge through a data driven strategy that allows us to actively track and adapt to evolving consumer trends, preferences and pricing dynamics, ensuring our product portfolio is consistently attuned to market needs. Thank you. And now I hand over the call to our CFO Mr. Sanjay Sabda to take you through more details on the quarter 3 and 9 month FY25 performance.
Sanjay Chhabra — Chief Financial Officer and Chief Risk Officer
Thank you Nikhil. Good evening everyone and thank you for joining us for quarter three FY25 earnings call of campus act as well, our revenue from operations grew by 9.1% year on year to 515 crores in quarter three FY25 largely benefited by higher distribution which registered a growth of around 9% and online channel which showed a revenue growth of around 11%. The company sold approximately 7.6 million pairs in Q3 FY25 up 10% year on year. The average selling price stood at around 675 in quarter three FY25, a drop of 1% year on year driven by higher saliency of accessories and socks footwear. ASP remained flat at 684. Our gross margin for the quarter was at 51.2% versus 51.4% in quarter three FY24 showing a drop of 20bps marginally lower driven by raw material price increases on a quarter on quarter basis. Also our Gross margin dropped by 140 basis points driven by raw material price increase, adverse mix and liquidation of non moving. The revenue mix between men and women and children categories stood at 81.3 and 18.8% in quarter three versus 80% and 20% in quarter three FY24 driven by higher sales of sneakers in men categories. Our EBITDA for quarter 3 FY25 was at 85.9 crore. The EBITDA margin expanded by 440 bps year on year to 16.6% owing to a normalized SGMA. So last year we had a couple of provisioning towards inventory and doubtful debts. So current EBITDA margin is at a normalized level PAT grew by 86.2% year on year to INR46.53 and part margins expanded by 370bps year on year to 9%. Our balance sheet continues to demonstrate strength with robust return ratios such as return on Capital employed at 22.1% and return on equity at 17.5% as of 31 December. With this summary I will now conclude my remarks and open the floor to the moderator for Q and A session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. If you wish to withdraw yourself from the question queue you may press Star and one Again. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raghurab Jawani from JM Financial. Please go ahead.
Gaurav Jogani
Thank you for taking the question sir. So my question is with regards to the gross margin decline. I mean we can see the gross margin being declining both sequentially as well as on a bio basis. So if you can highlight which particular RM did you see inflation and what are the steps we are taking to mitigate this. Also if you can quantify the impact of the liquidation of the non bs, the non moving BS. Inventory on the RN and the advanced mix that you highlighted.
Sanjay Chhabra
Hi, good evening Gaurav. Just to highlight one more number here. On a YTD basis for nine months the overall gross margin drop is just 50bps. We have been seeing the input price increase near the cartons wherein we had to take a or rather we had to give a price increase to our suppliers in the last quarter quarter fag end of last quarter this quarter we saw one of the component called TPU price increase primarily due to counter working duty imposed customs duty imposed. It was a conscious call on our behalf not to pass on the prices to consumers but we have taken selective price increases in November end and also in Jan beginning we see that we’ll be able to mitigate part of the this price increase or pass on this price increase to consumers in the last quarter. That will help us to mitigate a bit of the gross margin drop which is somewhere around 50bps on a YTD 9 month basis.
Gaurav Jogani
Sure. And sir if you can also highlight you know the impact of the non moving BIS inventory liquidation and the adverse mix.
Sanjay Chhabra
So as far as the BIS inventory liquidation is concerned that impact is in the range of anywhere between 20 to 40bps depending on in the last three quarters. So it varies depending on article to article. But as I said that on a full year basis it’s 50 bits takes a combination of the mix, the non BIS component and the raw material price increases which we have not been able to from next year we see the margins normalizing as we intend to liquidate majority of our non bs inventory within by margin.
Gaurav Jogani
Yeah so actually my question was that only is the entire non bs inventory now over or is still some impacting.
Sanjay Chhabra
We have less than 10% of our overall inventory in terms of finished goods accountable to non gas inventory which is a very small number, much manageable number. So we do expect that by March 9th we should be sitting on non significant.
Gaurav Jogani
Next question you know is with regards to the. The. The other expenses also I mean you know we have done a quite a bit improvement in terms of the absolute their expenses.
Operator
Is not increasing. But if we look at, you know, the, the ad spends per se, it was in this quarter around 10.8% out of the entire sale. So any, any guidance on an annual basis you can give on the advertising spend that we are, you know, wishing to keep? In what range? So anything here, of course. So actually the amp spends are in terms of actual value.
Nikhil Aggarwal
Absolutely flag with respect to quarter three last year on a yoy basis, in spite of the growth in the sales. So our overall numbers for the year would be trending in a similar range, you know, like 7, 7.5% what we’ve been trending at. And we don’t see any increase in amp spend for the entire year for quarter three. Sorry, just to add, even for quarter three, whatever we spent in AMT is absolutely flat in terms of absolute value. Right. So as a percentage it’s actually gone down versus last versus last year on in quarter three. Just to add quarter three, our amp spends are relatively higher considering the seasonality and custom. So as the last bit, you know, on the, the, the cost bit also, you know, we can see that that is not increasing very materially now on a sequential basis.
Gaurav Jogani
And we understand that, you know, you have spent the employee expenses ahead of time towards, you know, team building extra. So how should one, you know, build in the employee.
Nikhil Aggarwal
Your voice is muffled. Can you please repeat the question?
Gaurav Jogani
Yeah, so I was speaking about the employee cost. I mean, if you look at the employee cost as well, that’s been quite under control. And I think what we have been hearing from our interactions is that, you know, you have spent on team building exercise ahead of the time. So how should one look at the employee cost going ahead?
Nikhil Aggarwal
Okay, so we don’t anticipate any significant addition to the employee either headcount or the cost overall. We have been investing ahead of the curve in terms of the employee count. And we believe that with volume, like what we’ve seen in quarter three, with good volumes even going forward, we should be able to bring down this cost, the employee cost as a percentage. And so we don’t anticipate a significant movement in the cost, at least for a few quarters going forward. Like we don’t see anything in the short term or medium term.
Gaurav Jogani
Sure. Sir, thank you for answering my question. I will come back. Thank you. Thank you.
Operator
The next question comes from Vidisha Sheth from Ambit Capital. Please go ahead.
Videesha Sheth
Hi, good evening. I hope I’m audible just two small questions from my side. One, on the growth perspective, especially in the trade distribution channel, was it led, was growth led by primary sales or was this more tertiary that you saw and is it fair to say that Chapman Inventory at an overall level is a growth for you?
Sanjay Chhabra
Vidisha, this quarter it was like on the distribution front it was very focused in terms of secondary sales. So there was a very small gap between our primary sales and secondary sales. We were more focused towards replenishing. We are happy to share that we are. Most of our distributors are now on the DMS thing. So we are able to sort of execute the replenishment thing more efficiently. And also as far as our distribution network inventories are concerned, they are in a healthy around 80 to 90 odd days at a time in the. There’s no increase in. There is no push sale. Vidisha, just to be absolutely clear, like we have very good primary and secondary. It’s in line with the expectation and it’s absolutely the same. Like the same primary is being executed in terms of secondary numbers also. And we validate that through the multiple software that we have on ground. And also the dso, the credit days and the credit overall has not gone up and it’s a flat with respect to what it is last quarter also. So there is no push sale with respect to distribution.
Priyank Chheda
Understood. And the finished goods, you mentioned that less than 10% of Finnish goods are pertaining to the non bi certified state. When do you expect that to get liquidated out of campus system?
Sanjay Chhabra
Like I said, majority of it would be done by March end, by the next two months and there could be a very small portion of it left. But it’s not significant really. So we are anticipating that by this quarter four end we should be done majorly with the non BGAs FG inventory.
Videesha Sheth
Understood. And lastly, anything on the competitive landscape that you’d like to highlight? Not really, I don’t. Is there a specific question you would want to ask with respect to competition? No. In terms of either campuses market share visa competition is growing lower. So that would imply campuses increasing their market share. We have certainly outperformed in our key stage.
Nikhil Aggarwal
Of the northwest and central region, also east. So we do believe that we have gained the lost ground and there has been a good uptick in our market share and given competitive landscape. And the macro environment wasn’t really all that great in quarter three as well. It did improve yoy, but it was still kind of subdued. So in that kind of environment I think we’ve done reasonably well and we’re quite pleased with the way things are going because a lot of these initiatives that we’ve taken over the past few quarters are panning out really well and we see sort of consistency going forward.
Videesha Sheth
Got it. That’s all from my side. I’ll be back in it. Thank you.
Operator
Thank you. Thank you. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. I repeat, anyone who wishes to ask a question may press Star and one on the Touchstone telephone. Next question is from the line of Priyank Seda from Vallon Capital. Please go ahead.
Priyank Chheda
Yeah, hi. Thanks for the opportunity. So we have been shareholders and we have been delivering it good. But when it comes to guidance we have been guiding for few things which we haven’t been delivering. Right. We have guided earlier to deliver mid teen revenue growth. For nine months we are at plus 10%. We guided for ASP to remain flat for nine months we are negative 3 for margins. We have guided last three months ago to get 17 19% for the full year while for nine months we are at 14.4 in terms of EBITDA. I mean, I just wanted to ask, I mean are these guidances, should we take it given the evolving macro situation, given the internal strategy to the company? Anything that you would like to comment on the guidance is given earlier versus what you think is realistically achievable in FY25.
Sanjay Chhabra
So Priyan, a great question. I’d just like to say that we are very much sticking to our aspiration to get to those numbers. What we have added earlier, we never said that those guidances were for FY25. We’ve always maintained that the company is on good track to get to these numbers and we have been showing improvement quarter on quarter to get to these guidances numbers. So we still very much track with 17 to 19% as guided earlier in terms of EBITDA margin and 16.2% as delivered in this quarter is a good step up towards that number. And the same goes for asp. ASP is a slightly more dynamic number in nature. It depends on the actual market condition.
Operator
On ground during that time, which was a reflection of how the festivities panned out, how the demand is actual demand on ground and whether strategically is that the right time to take a price increment or not and how the inflation affects the raw material prices. So ASP is a bit more. But the aspiration certainly remains to continue to premiumize and sneaker portfolio is really going to add to that ASP Premiumization as well as that category in itself is a higher ASP commanding category. And given the growth and the plan that we’re building up for the sneaker category, we believe that it should continue to increase during the ASP. So like I said, the guidances were never for FY25 per se, but we believe that given the challenging macro environment, we have been improving our performance quarter on quarter and that should be, you know, converting to I hope the investor date as well. Definitely. I mean very positive with Daniel
Priyank Chheda
Checks that we found and surely your efforts on the sequential basis is visible. But yes, I mean when it comes to FY26, when we enter FY26 there are not much of the disturbances that we had in FY25 with respect to liquidation of inventory or with respect to the internal restructuring that we had. So when it comes to FY26, any non linear aspects of your business that you would like to highlight that we should keep in mind when it comes to the overall growth with respect to any of the segments or any of the channels that you would like to highlight?
Sanjay Chhabra
Not really. I think we are placed well. We are confident in our ability to deliver as long as the macros really don’t get any worse from here on and if they of course improve, it will certainly be a good tailwind. But as long as they don’t get any worse, we are very much poised to and confident in our ability to deliver the numbers. So when it comes to women and kids and or when it comes to south markets where we have a lot of leeway to grow versus the markets and to improve our throughput within the retail stores.
Priyank Chheda
Any specific strategy you’d like to highlight which we should think when it comes to FY26 and 27,
Sanjay Chhabra
The focus very much remains on the growth levers we’ve called out repeatedly, which is women, kids is certainly a big growth lever and there has been an increased significant focus in terms of increasing the pipeline of designs. The overall FTO count that we offer within these two categories has significantly gone up and the response has been very encouraging from the market.
Nikhil Aggarwal
Of course, the shift between men and women has slightly skewed in Quartz Gym. Primarily due to the sneaker offering being offered mostly on the men’s side. And that has done really well. So that skewed the number. But overall, women and child category continues to grow and we aspire to continue to take it forward. Anything else that you’d like to know around this?
Priyank Chheda
On a sneaker market, what would have been our sales on nine months versus the available opportunity? What is the kind of a capacity that we are building up after our new plant comes in? If you can further dig down into that.
Sanjay Chhabra
You mean capacity in terms of reduction capacity? We would be. Sanjay. We would be adding around 2.4 million pairs of sneaker capacity to our Haridwar new unit. Currently we are under 10% in terms of volume share and with the new capacity addition, we definitely expect to ramp up.
Priyank Chheda
Perfect. Thank you. Those were the few questions. But in public call we find it limited time to further understand your overall strategy. We have been following up for a meeting. Hopefully you can accommodate our request. Thank you.
Nikhil Aggarwal
Sure. Thank you. Thank you.
Operator
Next question comes from Vaishnavi from LRR Capital. Please go ahead.
Prerna Jhunjhunwala
Hello. Please go ahead, ma’am. Hi, this is Prerna Predna from Elara Capital. Thank you for the opportunity. I would like to understand how much price hike have you taken that you mentioned in the opening remarks? In last two months,
Nikhil Aggarwal
We have taken a price hike of anywhere between 7 to 10% in select product categories which are less price sensitive. So the idea is to, at a overall level to insulate our P and L from the raw material price increases. These price hikes are like. They’re not specific to a channel or to a geography, but they are very selective.
Prerna Jhunjhunwala
Okay. Should IT have around 2 to 3% overall impact when we see. On an overall basis? Y
Nikhil Aggarwal
Eah. As I said that the idea is to insulate the P and L from the input price increase or inflation. That’s what we are targeting.
Prerna Jhunjhunwala
Okay, understood. What would be your targets for distribution? Reach expansion by the end of the year and next two years. In terms of ebo, MBO expansion and any distributor. Each expansion that you are targeting,
Nikhil Aggarwal
As we have been talking about south as a geography where we need to penetrate more east and west, we are comfortable with the progress we have made in last one and a half years and we do have our internal targets. I would refrain from putting any numbers here, but we have seen even in this quarter we have been able to expand our reach as far as distribution as a channel is concerned. And that has got reflected in the kind of volume growth we were able to see.
Prerna Jhunjhunwala
Okay, understood. And please provide some color on how has been the demand in Metro Tier one, Tier two, Tier three and what has been the significant changes that you observed during the quarter and how it should be going forward. Assuming everything sacrosanct,
Sanjay Chhabra
Segmental sales with respect to the region has been very similar to yoy like we’ve done about 40%, 42% from north, about 21% from east, 7 odd percent from south, 22 and some odd percent from west and about 7% from central. So that’s been the shares this quarter with respect to the geographical split. And you know, there we see that with respect to metros and tier ones also it’s not been as big of a dampener as for some of the other consumer goods, you know, that we’ve seen in the market. So we’ve had a fair share. So for us it pretty much been flat with respect to geographical split versus year on year.
Prerna Jhunjhunwala
Okay. And will BIS liquidation have any further impact on your margins in Q4? It would not be a significant number. As we said that the inventory levels are very low. The non BIS inventory levels are very low as of now.
Sanjay Chhabra
So there could be a 10 or 20 bits impact. That’s what I mean. Before see, we don’t see any material number there.
Prerna Jhunjhunwala
Understood, thank you. I’ll come back to the question for any further questions.
Operator
Thank you. Next question comes from Omang Mehta from Photex Securities. Please go ahead.
Umang Mehta
Hi, thanks for the opportunity and congrats on outperforming this quarter. Sir, just wanted to check. So the SM made some comments regarding our focus package scheme for footwear and some big numbers were given beyond the headline. Would you have any insights as to what they are planning and how can it benefit players like us?
Nikhil Aggarwal
Hi Omano. So we’re also eagerly awaiting honestly the details of the budget to be received. Nothing has been put out on paper yet, but we do anticipate, you know, the government has called out these certain incentives. So clearly there is a drive and a push by the government to sort of grow the sector meaningfully because it does generate. It is. It is one of those sectors which generates one of the highest employment across the country as it is a labor intensive industry. And we are proud to be part of an industry where we are able to generate this kind of livelihood for so many people. So I think that is one of the biggest agenda for the government to increase employment that directly impacts our industry.
Umang Mehta
Got it. And the second one was on dis. So I recall that comment was that it could take a couple of quarters before we start to see any benefit. Would you still maintain that in the sense that still there is enough non BIS inventory in the system which was imported earlier and it will still take a few quarters to clear out. So I think the inventory levels have certainly dropped.
Nikhil Aggarwal
The non gas inventory, there could have been some tailwinds on account of that as well. We’re not sure that we can’t quantify it. Honestly, there’s no numbers to quantify that. But there could have been some tailwinds on account of the BIS as well in quarter three. So maybe, you know, the levels have reached an all time low and I don’t see, you know, a lot of non BI being liquidated in the market in the next.
Umang Mehta
Got it. And this one. Got it. Just one last. If I can ask a current quarter, could you give any qualitative tailwinds when half of the quarter is behind us? Would you say that the momentum has largely sustained in the current quarter?
Nikhil Aggarwal
As much as we’d like to, I’m afraid we don’t give out statements but you know, we. Like we said, the BIS tailwinds are certainly also there and a lot of initiatives have been planning out for the company. Well, so we are fairly confident of the delivery in the numbers.
Umang Mehta
Got it. Sure. Thanks a lot and all the best. Thank you.
Operator
Thank you. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. I repeat, anyone who wishes to ask a question may press star and one on the touch to telephone. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. Next question comes from Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Hi Nikhil. Thanks for the opportunity. Nikhil, I just wanted to check on the competitive intensity in the market. Obviously demand is one aspect but we have been through a couple of years of challenging period. Right. And there was a lot of competition that groomed in during this period as well. Since the demand has remained muted, I guess the challenges would have been there in their businesses as well. So are you sort of seeing some normalcy in competition or that remains still remains high in our area of competition?
Nikhil Aggarwal
Okay. Hi Dilanshu. So you know the way we think about competition is that it certainly motivates and pushes us to deliver more and get better at what we do. And this is something that we look forward to because it challenges us as a company and the management to do better. So we do believe that the competitive intensity did peak out as of last year because firstly the conditions obviously were subdued in terms of demand but also at the same time the supply was also quite a lot. And I think that has sort of peaked out last year. So we do see some normalization in that also with respect to competition. But again like I said, we’re not afraid and scared of a challenge. We really look forward to improving ourselves with respect to competition. Understood. And from your channel perspective in terms of working capital. So has that also eased off or still that remains a challenge because the demand has not recovered completely.
Sanjay Chhabra
Hi Devansha, this is Sanjay. From a working capital perspective, I mean for us nothing much has changed. We continue to maintain healthy DSOs. We do have a robust credit control mechanism wherein offer or we incentivize our distributors to avail the cash discount and pay us on time. So that’s the philosophy which continues on the inventory front. We have these two or 95 days of inventory holding from 110 days last year. So there also we have seen. Whatever numbers we are targeting in terms of driving inventory days, we are able to achieve that. So we don’t see any stress in working capital.
Devanshu Bansal
Thanks sir. My question was also to understand the distributor health. So from his perspective, how is working capital panning out for him? As in is he able to sort of recover money from the market or since there are challenges.
Sanjay Chhabra
So again I did answer this sometime back in terms of distributors days of inventory and primary versus secondary. So that again is a reflection. So this quarter our secondary sales and primary sales have a very, very nominal gap which reflects that we are more getting into a replenishment model when we reach that level. Which means that distributor is able to recover his money from retailer. He’s paying us on time and accordingly taking the inventory. What is there in demand in the market. So I mean at 84 days level through our BMS, the inventory levels are very much within our internal norms of 60 to 90 days.
Devanshu Bansal
Understood. So it’s fair that if demand sort of recovers then we are in a good shape. Right. So that’s the only thing lacking as of now.
Sanjay Chhabra
Yeah,
Devanshu Bansal
Thanks. Thanks. Thanks for taking your question.
Operator
Thank you. Next question is from the line of alias from Motilal Oswald Mutual fund. Please go ahead.
Aliasgar Shakir
Yeah, thanks for the opportunity. Hi. Question first is on the margin. So you made some comment. I just wanted to clarify that as you mentioned that BIS related inventory is now more or less behind us. So for FY26, you know, we should come back to our normalized 18% type of margin that we have been earlier doing and guiding. And also for fourth quarter, given that you mentioned that the impact is now limited from bis, we should achieve our normalized, you know, margin growth and Gaussian EBITDA level on a quarter on quarter basis.
Sanjay Chhabra
If you compare versus last quarter we have, we did improve on the EBITDA margin profile by roughly 400bps. And this quarter the numbers are like normalized numbers with no one off in the SG and this. So we are hopeful that we’ll be able to deliver margin in this range per se in the coming quarters. And FY36 also. All right, EBITDA to pack conversion.
Nikhil Aggarwal
Has also significantly gone up as we’ve become debt free. So Even like at 16 best we’ve been able to deliver. Sorry, We’ve been able to deliver a good decent patch. Right. So the conversion is also sort of helping us there get to the PAT level.
Aliasgar Shakir
Right? Absolutely. So this quarter of course we have improved margin significantly, but that is on probably, you know, a low base of 3Q due to, you know, certain issue that we had faced. So I agree this quarter has been pretty good improvement, but we should come back to a normalized margin Right. Next year. Assuming that if the demand is in a normalized state.
Sanjay Chhabra
Absolutely. Like 17 to 19% is what we’re aspiring for.
Aliasgar Shakir
Understood. Got it. And on the demand side, you know, you’ve been kind of looking, I would say conservative by saying that, you know, if demand increase then we do the margin. But just want to kind of get your sense on how is the demand on the ground. Do you see still challenging environment as you mentioned that competition also is not as accident. You are kind of doing better than them. So is the overall demand on the ground relatively decent for you to now kind of push for a double digit growth or you think that the environment is still very challenging and you know, I mean you’re not really sure in terms of how it will play out for you to achieve the milligram.
Nikhil Aggarwal
So I will not comment with respect to campus as that would be a forward looking statement. But what I can tell you is that the demand is not like absolutely normal in terms of how it used to be, let’s say two years ago. Right. So or three years ago rather. It is certainly an improvement from last year in Q3 as well and Q4 also. But I don’t know if the demand is, we can call it absolutely normalized demand. So there is still some pain in the market and we’re doing the best we can to make all of this.
Aliasgar Shakir
Got it. And from new product point of view, you know, we’ve been, we have launched Stika range and also become little active on the open footwear also. Right. Especially in the north, particularly in the summer season. So can you share what would be the mix over there and how much it should that help you in kind of, you know, upping your overall growth numbers?
Nikhil Aggarwal
Sure. So I would refrain from sharing those numbers in terms of mix Ali unfortunately because of the strategy, internal strategy that we follow. But it’s certainly on the cast like we have been. Increasing our SKU pound and our inventory in terms of open as well, you know, as that’s helping us penetrate the southern market and also normalize the impact in the summer months and reduce the seasonality impact. So that is certainly on the card. It is while the MRTs are very decent, but there will be some ASP impact on the counter, the open inventory. But we, we are confident of mitigating that impact with respect to the premiumization of sneakers. So there’s a counterbalance there and net net. We believe that the SP should increase only. Got it. And I mean footwear margins are in line with the overall market.
Aliasgar Shakir
Yes. Okay. And what about sneakers? How is this sneaker traction in terms of new products and the kind of competition that is doing qualitatively?
Nikhil Aggarwal
Yeah, the response is very encouraging as the brand is of course we are the number one top of mind brand in our target audience. So they have accepted the sneaker range very well and we’re getting a really good response. So there’s a number of initiatives that we have been taking on that side as well. And there’s a very exciting range also planned to be launched very soon with respect to sneakers and we do anticipate a good movement there.
Aliasgar Shakir
This is very useful. Thank you so much and wish you all the best.
Operator
Thank you. Thank you. I request the participants to restrict with two questions to the initial round and join back with you for more questions. Next question comes from Reisha Mehta from Green Edge Wealth Services. Please go ahead.
Resha Mehta
Yeah, thank you for the opportunity. If you could just comment on, you know, that over the last one or two years, you know, we had, you know, if I go back to your past transcripts, I see that we have lost some market share in north and you know, some of our key regions. So what is the reason for that? And also second question is on the online channels, I believe we’re classified in some three channels which is O2O and B2B and the marketplace. So can you just comment on, you know, what was the problem in this O2O and B2B channels and what was the revenue contribution in the past and what is now that reduced to?
Nikhil Aggarwal
Right. So with respect to the market share in the North. Right. So there used to be, and I’d like to call that out that there was some. Conflict across channels because, you know, online was an absolutely new beast that we had to tame. The dynamics of that channel are very different from the offline, the way it works. And we were facing, you know, lot of conflict between the channel partners. As, you know, online there was some discounting versus offline discounting months later. So that was how it was about two years ago. But over the last two years we’ve basically segregated the entire portfolio across the two channels. So there is no common designs as we speak, like hardly, barring maybe a handful in single digits which are very old designs. All the ncb, all the new designs have been completely segregated across the two channels and therefore the conflict has been completely resolved. So there is no issues today. And that has also really helped us gain our market share back. Right, apart from. So these are some of the things we’ve done internally, right, to gain that market share back in the north, especially in the Northern region. Sorry, what was the other part of the question?
Resha Mehta
Yeah, so before I go there, just to follow up here. So we had lost the market share primarily in the north market or even we had lost in the central, west and eastern markets. And the reasons for, if any in these three markets were also similar to the channel conflict region given for the North.
Nikhil Aggarwal
So it was, well it was across India, but mainly it was in the north actually because we continued to gain market share, maybe because our market share in the other territories was. Anyways, the base was quite low. North was very high as a base it used to be about 50% or 52% about two to three years ago if I remember correctly. And you know, I just want to add here that our saliency in north has gone down slightly. That’s not because of loss of market share in absolute terms. Our north region is still showing a revenue growth. The saliency has gone down because in other regions we have grown disproportionately higher.
Resha Mehta
Understood. So and you know this, these online channels like O2 and B2B. So firstly what are these channels? And you know, I remember reading that, you know, there were some problems in these channels and you know, we had to kind of scale down on these channels. So what revenue, what was the problem here number one and number two, what was their revenue contribution let’s say in FY23, FY24 and what is it down to now? And is this like a permanent loss in revenue or we’ve kind of made it up with, you know, something else. So this O2O
Nikhil Aggarwal
Was something that one and a half years back when some. Some of the players wanted to, players like Udan and Ajio wanted to get into an online retail sort of business or cater to the last leg of the retailers. And these channels suddenly show disproportionate growth. And then let’s say after a year or so they scaled down because of the profitability issues and just a cannibalization. I mean, these channels started catering to some of the distribution business. And when they were out of business again, the volume shifted back to the normal pockets of distribution or online. So that’s how it was. And I think we have mitigated that. The volumes have gone back slightly to the marketplace and to some extent to the distribution.
Resha Mehta
So what is a B2B channel then? Oto, you said is. Yeah, it’s a continuation of the same question. Just a clarification,
Nikhil Aggarwal
Let me answer this.
Resha Mehta
And the revenue contribution which was there in the past and which is now from these O2 and B2B channels.
Nikhil Aggarwal
So we call B2B something like when we sell outright to the platforms like Flipkart, Amazon or Myntra, so that business continues to be there. And it’s for these channels to decide how much they want to sort of do the business in the outright vertical. And again, between marketplace and outright, it’s just a swap. So if in a quarter there is a higher outright business, to that extent marketplace orders are. Or Flipkart is directly catering those orders through their outright inventories, instead of we supplying those orders through the marketplace or from our warehouses. So it’s a swap between two verticals.
Resha Mehta
Right, understood. And your revenue contributions in the past versus now,
Sanjay Chhabra
I would say wherever we are, both the channels outright and marketplace in the nine month period have shown a growth. So the revenue saliency continues to be flat versus last year
Resha Mehta
And O2O would have come down significantly. Would that understanding be right?
Nikhil Aggarwal
OTO does not exist now. So Ajio and Udan both are out of this system.
Resha Mehta
And at their peak they would have contributed to how much of total revenue the OTO channel?
Sanjay Chhabra
I think if I recall correctly, at their peak they were around 50 crore business.
Resha Mehta
Right, right. All right, thank you. I’ll come back in the queue. Thank you.
Operator
I request the participants to restrict the two questions in the initial round and join back the queue for more questions. Next question comes from Aditya Ketan from Smiss Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you sir, for the opportunity. My first question is on to the EBITDA per pair. Like this quarter we have the best EBITDA per pair of around 108 rupees. How much sustainable service number is for the near term and for the longer term and would so gross per pair would be a good indication to look going ahead. Or we can look at the EBITDA per pair only.
Sanjay Chhabra
I would say that level per pair benchmarking may not be a true reflection because our number of units sold includes units sold to different channels at different price points with a different cost element. It also includes accessories and in our units wherein we sell even socks. So per payer EBITDA would not be a right benchmark. It’s always good to see on a percentage basis. And as Nikhil mentioned that we aspire to go back to the earlier days of 17 to 19% and we are just trying to optimize both on the or rather bring cost efficiencies and also at the same time drive premiumization and operating leverage. So all these three pillars should help us to improve our EBITDA margins.
Aditya Khetan
Right? Okay. Okay. From the second question is that any indication like onto the demand side like we have heard from the so many other companies that demand has started to slow from December. Have you also witnessed the same and you you see that demand so structurally slowing down for the premium products especially in the coming six months because of the inherent slowdown. Also what we are witnessing can this change some dynamics at the ground and like volumes and EFT can drift downwards from here we can talk about the quarter gone by.
Sanjay Chhabra
I mean I would refrain from making any outlook sort of statements for the next quarter or next year at this point in time. But if you see the quarter gone by, as I mentioned that in the distribution business it was less of a push sale, it was more a replenishment on the basis of secondaries happening. So that’s a reflection that there was a bit of demand uptick versus last quarter’s last two quarters. Of course growth versus last year again reflects that versus last year. Also there was demand uptick. So that’s an indication. But again at the same time the ASP stagnation in ASP or dilution can be an indicator of lack of premiumization. But at the same time, I mean it will be for an individual player, it will be a structure. Strategy how to drive more reach more expansion and introduce new product lines or product to drive premiumization and also to drive volume.
Aditya Khetan
Just one last question. Any sort of a new price point or can you join back with you, please.
Operator
Okay, thank you. We have a follow up question from Gaurav Jovani from JM Financial. Please go ahead.
Gaurav Jogani
So this regarding the dividend. You know, I think first time announced a dividend of 70 pass, but the percentage shows around 20 to 25%. So this would be the only dividend. There could also be a final dividend also apart from and if you can also highlight the dividend payment policy going ahead.
Nikhil Aggarwal
Gaurav, of course, the dividend. Firstly, we’re very happy to declare dividend interim or whatever, you know, for the first time in the history of the company. So that does give us confidence in our ability to deliver and we’d be looking, you know, we’ll try to deliver dividends quickly going forward. Right. That’s the idea. I can’t comment whether there’ll be a final dividend or not. That would depend on the final results and on the board’s discussion. But certainly, you know, we see this as something of quite a significant to our organization. The other way around, you know, is there any percentage of FAD that you’re targeting on a general basis who play out as dividend? Not really. I mean we’ve done about close to 25% at this point for YTD but totally depends on the board.
Operator
Thank you. We have a follow up question from Prena from LRA Capital. Please go ahead.
Prerna Jhunjhunwala
Thank you for the opportunity. I would just like to understand what will be the ASPO sneaker category that you are selling today in the books. So this would be at least 15 to 20% higher versus our current regulator days because. Continue. Sorry.
Sanjay Chhabra
It would also have a higher cost component, but net net, it would be marginalized. Okay. And the new launches will also be in similar price points. For each of the channels we’ll have different price points. I mean it caters to the different segment of consumers. Like if you go to the ebo, you will find our products at a higher price point because we display our entire range there. Whatever is available in online or the distribution channel. And those price points are different.
Prerna Jhunjhunwala
Okay, understood. And the last would be.
Operator
I’m sorry to interrupt. Can I join that with you please? Sure. Thank you. Thank you. I request the participants to restrict with one question and join that if you for more questions. Next question comes from Oman Mehta from Kotak Securities. Please go ahead.
Umang Mehta
Hi, just a quick follow up on the bookkeeping question. What was the growth in marketplace model this quarter?
Sanjay Chhabra
I think it was in line with our overall growth distribution we did grow around 9% but in online it was 11%. So the marketplace model within online was also 11. Marketplace was slightly lower because we did grow more in the outside business.
Umang Mehta
Okay, sure. Thank you.
Operator
Thank you. We have a follow up question from Priyank Chadha from Vallum Capital. Please go ahead.
Priyank Chheda
Yeah, same question. Marketplace and online YTD or nine months. What would have been the growth? And just a feedback. I mean this all numbers. Now we can improve these disclosures via presentations so that we can have a concrete more discussion on the call. Now nine months numbers on marketplace and online. Thank you.
Sanjay Chhabra
Your point taken. We’ll try to include all those numbers in the investor’s presentation.
Priyank Chheda
Perfect. And so on the EBOS, we haven’t added much of the EBO versus we had earlier plans to open at least 100 EBOS. What’s the outlook on that? How should we look? FY 2526 as well as on the trade distributions, at least on the presentation number, I can see that we have added a lot of new retail touchpoints versus the flat distributors. We were planning to improve the throughput within the same touch points. Right. I mean now this has been the addition which. So how do we look into the sales throughput per touchpoint and as well as on the ebos. Thank you.
Sanjay Chhabra
So on the EBO front this quarter the net addition has been less. That’s purely because of market conditions. We are now being more conscious about the geography wherein we want to set up our own cocoa stores. So we did add around six stores in this quarter. But our strategy would continue to be 40 to 50 stores addition in the year. And as far as distribution is concerned, please appreciate this. Quarter three is both festival season and also seasonality in the north. So. So the retail touchpoint addition is highest in quarter three. Having said that, we added around 7 to 8% retail touch points but our sales growth was 9 to 10%. So the output or throughput per outlet is still higher. But yeah, Q3 numbers are skewed and. We look at reach more through a different yardstick wherein how many retail touch points are getting billed on a monthly basis? That’s our internal yardstick that. That is more consistent and more balanced. Number. Yeah. Q3. The numbers go up.
Priyank Chheda
Sorry, I couldn’t get the gist out of it. I’m. My question was. So we were looking for. Looking forward for an improvement in the throughput plus retail outlet versus we have added the outlets.
Nikhil Aggarwal
Yeah. So that’s right. So what I’m saying is we added around 7% outlets. The outlet active outlet count increased by 7% but my revenue growth increased by 9 to 10% in distribution. Right, got it. Per outlet has gone up.
Priyank Chheda
Perfect. Even on the distribution channel wise numbers. It would be great if we can have a clarity because we have given for December while the base quarter numbers are not there with us for distribution on D2C online and offline.
Nikhil Aggarwal
Okay,
Operator
Thank you. Owing to the time constraints. That was the last question for today’s con call on behalf of Campus Activewear Ltd. That concludes this conference. Thank you for joining us. And in case of any further queries, please reach out to campus activist investor relations team@irdampasshoes.com. you may now disconnect your lines.