Campus Activewear Ltd (NSE: CAMPUS) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Nikhil Agarwal — Whole Time Director
Sanjay Chhabra — Chief Financial Officer
Uplaksh Tewary — Chief Business Officer
Analysts:
Unidentified Participant
Videesha Sheth — Analyst
Gaurav Jogani — Analyst
Umang Mehta — Analyst
Sameer Gupta — Analyst
Resham Jain — Analyst
Rehan Syed — Analyst
Ankit Kedia — Analyst
Devanshu Bansal — Analyst
Aliasgar Shakir — Analyst
Tejas Shah — Analyst
Presentation:
operator
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operator
Ladies and gentlemen, you have been connected to Campus Activewear Limited’s quarter 3 and 9 months FYI 26 earnings conference call. The call will begin shortly. Please stay connected. Please note that you have been connected to Campus Activewear Limited’s quarter three and nine months FY26 earnings conference call. The call will begin shortly. Please stay connected. Ladies and gentlemen, good day and welcome to the Campus Activewear Limited’s Quarter 3 and 9 Months FY26 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 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 and unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that could cause future results, performance or achievement to differ significantly from what is expressed or implied by such forward looking statements. The Campus Activewears management team is represented by Mr. Nikhil Agarwal, Whole Time Director and CEO, Mr. Sanjay Chhabra, CFO and Mr.
Uplaksh Tiwari, CBO. I now hand the conference over to Mr. Nikhil AgarWal, Whole Time Director and CEO for his opening remarks. Thank you. And over to you sir.
Nikhil Agarwal — Whole Time Director
Thank you. Good evening everyone. Thank you all for joining us today for our quarter three and nine month FY26 earnings call. We continue to demonstrate strong performance in quarter three and nine month FY26 driven by our focus on widening distribution and strengthening our product mix which has resulted in a higher asp. The robust demand during the festive season coupled with the positive impact of GST rationalization has further accelerated our performance during the quarter. We are elated to report that our revenue surged by 14.3% YoY and our profit after tax grew by 37% YoY owing to sustained growth across the channels.
We take a highly focused approach to product segmentation with our portfolio encompassing various occasions, channels and consumer mindsets. Building on this strong foundation, we are expanding our design expertise into full scale apparel maintaining the same agility and consumer centric innovation that has characterized our activewear journey. As pioneers in offering premium sneakers at affordable prices, we remain committed to making high quality design forward footwear accessible to a wider audience. Our sneaker portfolio has doubled in volume validating strong consumer adoption. The trend of premiumization continues to play out positively for us with ASP rising by 5.2% to INR 711 in Quarter 3 FY26.
This growth has been aided by a higher saliency of premium SKUs and strong acceptance of our refreshed collections. At the beginning of quarter three, we launched our brand campaign you Go Girl featuring the actor Kriti Sanon. This campaign has meaningfully strengthened our connection with women consumers who navigate life on their own terms, unbothered by labels and guided by choice. We are thrilled to see that the campaign resonated strongly with our female consumers resulting in an improvement in the women’s category mix. On the manufacturing front, we are pleased to share that our PONTUSAI facility which focuses on upper manufacturing has now fully stabilized.
Additionally, we commenced commercial production of premium apples at our Pants Nagar facility in January 2026. This enhancement of our integrated manufacturing capabilities will equip us to meet the rising demand for premium products in the coming quarters. With more than 90% of our raw materials sourced locally and all assembly conducted in house, our manufacturing ecosystem is not only compliant but also strategically independent within a BIS regulated environment. As a natural progression of our brand, we have strategically ventured into atleisure apparel in January 2026. This expansion not only broadens our addressable market but also unlocks incremental revenue opportunities from our existing customers while enhancing store productivity.
This move aligns perfectly with campus long term vision of becoming one of India’s prominent lifestyle brands. Looking ahead, we remain focused on disciplined execution, customer centric innovation and and strengthening our operational efficiencies. These efforts are aimed at ensuring long term value creation for all our stakeholders. Thank you. And now I hand over the call to our CFO Mr. Sanjay Chhabra to take you through more details on the quarter three and nine month performance.
Sanjay Chhabra — Chief Financial Officer
Thank you Nikhil. Good evening everyone and thank you for joining us in Q3 and 9 month FY26 earnings call for Campus Active highlighting on quarter 3 FY26 performance our operational revenue grew by 14.3% YoY to INR 589 crores in quarter 3 largely benefited by higher distribution which has registered a growth of 9% and online channel which has grown by around 18%. The company sold approximately 8.3 million pairs in quarter three. The average selling price grew by around 5% year on year to Rs 711 in quarter three. Women’s and kids share in the revenue mix has improved from 18.7% last year to around 22% during this quarter.
Our gross margins were 53.1% in quarter three versus 51.2% in quarter three last year due to higher sneaker mix and higher other income or operating revenues which is partly offset by lower mix of open footwear and also because of change in accounting policy by our EE com portals FK and Myntra, resulting in a lower revenue and lower freight or commission cost. Our EBITDA for quarter three was INR 115.8 crores. The EBITDA margin stood at 19.5% during the quarter, an improvement of 290 basis points versus last year driven by seasonality and execution led higher sales in key channels helping us to leverage our fixed cost more efficiently.
Our PAT for quarter three was INR 63.7 crores. The PAT margin stood at healthy 10.7% during the quarter, an improvement of 175 basis points versus last year. Our balance sheet remains strong with return ratios I.e. return on capital employed at 20% and return on equity of 17.6% as of December 25th. 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 sir. We will now begin the question and answer session. Anyone who wishes to ask questions may please press Star and one on the Touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Please Enchantment. We will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Vidisha Seth from Ambit Capital. Please go ahead.
Videesha Sheth
Yes hi, I hope I’m audible. Thank you for the opportunity. So growth in the second and third quarter combined has been as high as 15%. So if you can break down the underlying levers of this double digit growth. I understand you talked about widening distribution and product mix etc. But probably in terms of the strategic alignment, if you could highlight the granularity and B since we’re a month into the quarter now have this have similar growth trends sustained. That was my first question.
Uplaksh Tewary
So hi Uplag this slide in terms of quarter 2 and quarter 3 growth. Like you mentioned around the 15% number at a blended level. 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 that that both Nikhil and Sanjay mentioned before. So I mean very strong execution partner focus along with a very strong product point of view. Back with A very strong marketing campaign, which was the Yougo Girl campaign that we executed last quarter.
I think all of these things linked together is the reason why we are delivering this. And. On the forward looking, I don’t think we will be able to give any specifics on the.
Videesha Sheth
My second question was that if I were to break down the region wise, the revenue makes. There’s been a good spike in the northern region where the mix has gone up from 40 to 47 odd percent. So are there any focused efforts being undertaken for the specific region or would it be pertaining to weakening competition? If you can throw some light on the same.
Uplaksh Tewary
No. So no, it’s basically a complete focus on, you know, of course we have, we have very different strategies now for every region. So the way we are playing out the distribution channel is it’s a state specific, almost like a state specific strategy that has been formulated and we’ve been addressing that, you know, for the past two or two quarters now almost. So that that is what is giving us the leverage also apart from obviously having a very, very strong product line which is a, which is again like channel focused and region focused specific also at the same time.
So multiple initiatives of these kinds have come together to give us this growth.
Videesha Sheth
And lastly, just on the sneaker portfolio, you mentioned that the volume is nearly doubled. So what would the current sneaker portfolio mix be in terms of volume and overall revenue?
Uplaksh Tewary
So we don’t share that number in terms of volume. We just wanted to let you know. Of course the base is also slight. It’s like a new category which you just entered in the last one one and a half years. But it’s basically doubling that volume for the past every quarter almost right. For the last one year. So it’s basically, and it’s a premium category. It’s about 900 to 910 rupees ASP contribution just from Sneakers. So it does, you know, materially add to the premiumization.
Videesha Sheth
Got it. I had a few more questions. I’ll get back in the queue.
Videesha Sheth
Thank you.
Videesha Sheth
All the best.
Nikhil Agarwal
Sure.
Uplaksh Tewary
Sure.
Uplaksh Tewary
Thanks.
operator
Thank you. The next question is from the line of Gaurav Jogani from GM Financial. Please go ahead.
Gaurav Jogani
Congratulations on the strong set of numbers and thank you for digging. My question, my first question is with regards to, you know, the growth in the online format this quarter. It seems, you know, quite great. How much is this, you know, due to the shift of the festivity led and how much you would see in terms of the core growth on the online space also in addition, if you look at the while the number of touch points for you have increased from 28,000 to 29,000 or however, if you look at the number of distributors this quarter, it seems that they have come down.
So if you can help us on these two aspects.
Nikhil Agarwal
So hi Gaurav, on the two questions that you asked specifically on the online front, about two years back, we started pivoting our business from an outside based model to a marketplace model.
Nikhil Agarwal
Right.
Sanjay Chhabra
I think we are pretty much complete on the journey. Only one big platform, we do outright business model with them. Every other platform today sits on a pure marketplace business gives us much stronger control, gives us much stronger levers of running this business. Right. And within the larger marketplace ecosystem, I think we have been able to deliver extremely good performance in certain accounts like Amazon. I think the pivot from a market outright to a marketplace business has been the strongest in this channel and which is also leading to the overall growth of this vertical. On the general trade side, we have launched a newer format of a superstock.
Right. And smaller wholesalers or smaller distributors have been mapped under the supermodel. And hence you might see a small reduction in the overall distributor count because those are not directly mapped to us. They will be mapped to intermediary of a super stockist.
Gaurav Jogani
That’s helpful. Thanks. Just one more thing. You know, in the past what we have noticed is there has been quite a volatility in terms of the quarterly performances that we have seen. But going now, how confident are you of, you know, at least sustaining these kind of trends or performances going ahead?
Nikhil Agarwal
So Gaurav, we understand, you know, your apprehensions and you know, we’ve, that’s what we’re trying to fix. We’ve done a lot of interventions over the past three years to bring a sustainable growth and predictable growth to the organization. And, and you will appreciate that for the past at least two to three quarters, we’ve been consistent in doing that. And therefore we have a high degree of confidence on the way forward as a lot of those initiatives which have been planned for the past three years are now materializing and coming together. So we have high degree of confidence on the way forward.
Gaurav Jogani
Sure. And just one last question from my end is in terms of the gross margin expansion that we are seeing, and it is also collaborating with the premium contribution of the Sneakers portfolio also increase. So can we take the current margins, the gross margin level, at least as a sustainable one going ahead, if not expanding? And if you can also help us in terms of the certain cost initiatives that are helping you to bring the Overall cost up. That would be the last set of questions for me.
Sanjay Chhabra
Gaurav. Yes, we targeted an improvement in gross margin versus our last year numbers in our annual business plan and we are sort of consistently heading towards that. However, our business is dependent on seasonality or sort of skewed by seasonality, festivals and marriage seasons and also the product mix. We are trying to be consistent and I mean the next quarter would be more towards open footwear. So it would be unfair to compare quarter on quarter gross margins on a full year basis. That would be a right reflection and the aspiration is to improve versus last year.
Gaurav Jogani
Right.
Sanjay Chhabra
And on the cost side of course we are trying to be more consistent in terms of phasing of our production. That helps us to plan our facilities or lines and optimize on the cost side which is able to help us in mitigating the inflation on account of minimum wages, etc. And that’s what is translating into leverage benefit which is getting reflected in the numbers.
Gaurav Jogani
So just with one clarification actually the reason why this question was this time around if you look at the ad spend, the ad spend spends was quite decent of around 65 crores in absolute that we saw. So wanted your comments in this context that is the ad spend this quarter a bit more higher because of the seasonality and probably this would normal out for the yearly average that we normally have seen in the past.
Nikhil Agarwal
Yes, of course this quarter the ad spends are higher because of our TV campaign and also the digital campaign.
Nikhil Agarwal
Okay.
Nikhil Agarwal
You know like it’s, it was just to give more clarity on that. We, we are as you know focused on long term brand building and we did about 10.2% if I’m correct in quarter three last year on the ad spend versus 10.9%. So this is of course a quarterly seasonality thing as well. At the same time we will be in line with the overall ad spend that we’ve planned within the budget, you know, so you know, we don’t want to reduce on the ad spend at this point.
Gaurav Jogani
And just lastly, sorry, if I may slip in one more question on the the new Athleisure apparel venture if you can, you know, give us more insight into what is it just now right now only introduced in the EBOS or is it also piloted in some MBOs as well? How are you going about it? How are you thinking about it? Some more color you can give on it?
Nikhil Agarwal
Sure.
Nikhil Agarwal
So it’s currently we’re very excited to launch this entire new category. This has been on our bucket list for quite some time and we’re glad that we came around to getting it launched. Basically it’s going to increase our addressable market significantly and we expect because this is a similar model to how the bigger companies, the MNCs, have grown across the world and it’s a natural pivot for us as a sports company and organization and this should incrementally add to the per store economics meaningfully. But at this point it’s basically a pilot that we’ve done in about 60 odd EBOS and this will, you know, we will continue to add more EBOs because there’s a small change we have to make into the view as well to add a trial room and a certain area dedicated for apparel space.
So as we’re doing that, we’ll continue adding more and more stores to the mix. But at the same time we’ve also launched it on our brand.com and Myntra and Amazon. So it’s been launched on these three platforms at the same time. So far the result is very encouraging.
Gaurav Jogani
Thank you.
Nikhil Agarwal
Thanks Guru.
operator
Thank you. The next question is from the line of Umang Mehta from Kotak Securities. Please go ahead.
Umang Mehta
Hi. Thanks for the opportunity and congrats on a great quarter. My first question was on online. So continuing on what Gaurav was mentioning, you’ve seen acceleration in online growth despite slightly early festive this time around. Do you are you tracking shared games on the platform? Anything on that front, if you can highlight this is whatever data you get from the platform.
Nikhil Agarwal
So yeah, I mean we like I mentioned earlier that there is a very strong pivot towards the marketplace business and we are aggressively expanding this channel as well. This means a pivot has been very strong as well as the women pivot. One of the strongest channels to have delivered both of these key organizational directives has been the online channel. And I mentioned earlier there has been a very strong shift or incremental uptick in our Amazon business as well. We have pivoted completely from an outright plus market business to complete market business over the last 18 months and we have been able to work a lot on the input metrics or the metric that are required to succeed.
So we’re trying to get better at the marketplace operations as much as we can and as well as on the since there is no published data that these channels offer us, I would not be able to comment on that, but of course there would be some improvements for sure looking at our performance.
Umang Mehta
And what was the mix of Marketplace vs outright and 3Q?
Nikhil Agarwal
So apart from there Is only one platform that we do outright business to do that is click.
Umang Mehta
Okay.
Nikhil Agarwal
Percentage of online sales which came from Marketplace versus outside.
Nikhil Agarwal
Would be approximately 80, 20, 75. 25 roughly.
Gaurav Jogani
Got it.
Gaurav Jogani
Got it. And second question was Sanjay. Sir. So on this inverted duty structure, what would be the approximate impact if there’s no resolution by your end for the full year?
Nikhil Agarwal
We are still evaluating.
Nikhil Agarwal
I mean as far as raw materials is concerned, we have started filing refunds with the state governments for the inverted duty structure.
Umang Mehta
Okay, got it. And this one, bookkeeping. So could you call out the optical or basically the adjustment in business model of the online platform. What was the impact on top line and other this quarter?
Nikhil Agarwal
Yeah, for this quarter. For this quarter it was approximately 10 cr.
Umang Mehta
Got it. Thank you so much guys and all the best.
operator
Thank you. The next question is from the line of Sameer Gupta from India Infoline. Please go ahead.
Sameer Gupta
Hi, good evening sir. And thanks for taking my question. First of all, congratulations on a good set of numbers. Sir. I believe that there is a GST rate cut for a large part of the products that you sell. And this quarter would also have seen some impact of channel upstocking, which is what the feedback is wherever there are GST cuts. So if you step out the or let’s say just look at channel upstocking first, would you be able to like give us a adjusted number of our growth this quarter? If you adjust for that.
Nikhil Agarwal
We don’t.
Nikhil Agarwal
See any channel upstocking. I mean our inventory with the channel partners continue to be at 84 days at the end of this quarter from our DMS data which hovers in the range of 80 to 90 days. So it is very much within the norms. And so far as we believe that we are working on replenishment models. So whatever secondaries are happening, we are able to match it with commensurate primary sales and keeping an eye on the inventory levels with the distributor partners.
Sameer Gupta
Got it, sir. And if I may ask, at a consumer level what would be the price reduction on a blended basis for campus as a company?
Nikhil Agarwal
At a consumer level we have, I mean at different price points we had to change the MRP. So let’s say the MRP reduction would be in the range of 5 to 6%.
Sameer Gupta
But for you like a large part would be in the range of thousand to 2500 MRP, right?
Sanjay Chhabra
All of it.
Sameer Gupta
Yeah. But there the GST cut is from 18 to 5. So technically a 10, 11% kind of a price cut should have been passed on, right?
Sameer Gupta
No, but our price, our selling Price normally is below thousand.
Sameer Gupta
No.
Sameer Gupta
So it is for us. The X factory pricing is normally at 12%.
Sanjay Chhabra
You’re looking at the MRP’s Samir, right? Yes, you’re looking at the MRP. But our transaction value, our billing value is like 50% of the MRP approximately as a thumb rule.
Sameer Gupta
But sir, the GST rate would be dependent on the MRP only. Right.
Nikhil Agarwal
Sorry, your. If your correction is to. At a consumer level, the consumer level the benefit would be higher.
Sameer Gupta
Got it sir, got it. Thank you sir. Thanks for this. Lastly sir, with free trade agreements being signed, I know it’s out of context but footwear as a sector has become more competitive as an export. And given your manufacturing prowess, would you be like exploring this opportunity going forward?
Sanjay Chhabra
Yeah, absolutely. It is. It’s an exciting opportunity given that we are one of the lowest cost producers as a country. Right. So we’ll definitely be exploring that market.
Sameer Gupta
So any plans as to capex or supply augmentation in near future?
Nikhil Agarwal
No, we’ve already invested, you know, as you know into Pantnagar and Ponta just came online and stabilized. And Pantnagar, the new investment that we recently announced two months, six, four months back is already live with production. So now we expect to stabilize that plant soon and that will definitely add to the existing capacity. So we’re good for the time being. We don’t need to invest more.
Sameer Gupta
But sir, that would be for the domestic market, right? I mean if you’re exploring newer markets and exports you would still need more capacity plus some level of business exploration etc. Some team there or something on those lines also. Right?
Nikhil Agarwal
Adding capacity is not a constraint as we already, you know we’ve invested into the, into the building landed building of fund manager which is anyways very, very large and we are just activating a small portion of that so we have enough space to you know, add capacity as and when required and it’s, it’s very quick for us. Like we don’t take time to do that.
Sameer Gupta
Great sir, thanks for. Thanks for this. I’ll be back in the queue for any follow ups. Thanks a lot.
Nikhil Agarwal
Yeah, sure. Thanks.
operator
Thank you. The next question is from the line of Resham Jain from VVT Asset Managers. Please go ahead.
Resham Jain
Yeah.
Resham Jain
Hi.
Resham Jain
Hi Nikhilji. So I have two questions. First one is with respect to the apparel business you mentioned that you’re doing athleisure apparel primarily through ebos right now. Is that correct?
Nikhil Agarwal
Hi Resham. No, so it’s EPOS of course is a big focus but we’ve also launched on brand.com campashoes.com and myntra and Flipkart. Sorry, Amazon, not Flipkart, Amazon.
Resham Jain
Okay. And possibly compared to the existing footwear business, this will have a much larger online play. Given that this category itself is very large and you are the largest player on the footwear side. So that will give some kind of help to you on the online side.
Nikhil Agarwal
Yeah, I mean, absolutely. Online is a big market for this category. On the offline side, we just started with EBOs first. We’d like to cover the base of EBOs and possibly we can look at the GT model later, but that’s like a little too early to call that out. Online would be definitely a key market for us to focus on.
Resham Jain
Okay, understood. And the second one is on the EDOs. It’s a very small piece right now.
Resham Jain
But.
Resham Jain
Given that our price points, which is comparatively much lower than most of the other footwear retail players, how are we thinking about the EBO strategy? Also in context to most of the foreign brands now, they are more focusing on the experience store rather than a typical retail store. So any thoughts on the EDO strategy?
Nikhil Agarwal
Yeah, absolutely. So we’ve not actually increased the overall count in this last one year versus last year, FY25. In these nine months, FY26, our count is more or less static because we’ve shut down a few non profitable stores and we’ve opened a few. Right. So currently the focus for us is on profitability. You know, first we are focusing a lot on profitability and opening stores very judiciously accordingly rather than just going, you know, all out on opening stores and adding to the cost. So that’s. And you know, apparel is a big part of that as it will add to incremental revenues on a per square feet basis.
So, you know, we want to absolutely bring profitability first and then continue adding more stores. So possibly going a little bit slower than what we initially anticipated to. You may want to add anything.
Sanjay Chhabra
Yeah. On the EBO front side, we are trying to get a unit economics at a store level perfectly right. The apparel and the other some ancillary category addition to the store is an effort in that direction as well. Right. We as a strategy wanted to open commercially viable store because a large part of our EBO network is operated through a franchise partners. So profitability of this partner is very imperative and we want to get that economics perfectly right. In terms of the experiences, there will be certain important stores that we will open. We have had some stores on those lines like Bandra in Bombay and some other stores on those lines.
We have had some stores which were made to exhibit the brand in its entirety. But yeah, at an overall level profitability will be a very strong favorite because these stores are being opened across the country through a different multiple franchise partner networks. And to ensure that they are making strong returns on their investment, we need to ensure profitability stays as a core. But this year since we opened about 300 stores in less than four years, this year we are looking at as a way to correct our footprint and do a short correction in our unit economics and then after maybe a few months or quarters we will again get back to expansion on this channel.
Resham Jain
Okay, thank you so much. Congratulations and compliment especially on the working capital you guys are managing. Quite incredible. So thanks.
Sanjay Chhabra
Thank you.
operator
Thank you. The next question is from the line of Rehan Syed from three Netra Asset managers. Please go ahead.
Rehan Syed
Oh yeah. Good evening and thank you for giving me the opportunity. Like my most of the questions have been answered so I just want understanding regarding your replenishment. So sir, in season replenishment and never.
Rehan Syed
Out of stock models are key pillars.
Rehan Syed
So approximately what proportion of quarter three sales came from replenishment versus crash launches and how, how does this mix influence gross margin inventory risk going forward?
Nikhil Agarwal
We couldn’t get that completely. I think there was some voice jitri there. But what I understand is you’re asking about replenishment versus the code. Like replenishment is a code model definitely, you know that we follow. It’s a DMS and the digital apps that are that we have on the sales, you know the feet on street that the sales officers use. And through that model we basically replenish the inventory which we see at the distributor stock levels which is diminishing but which is, which has high, you know, sail through. So we, that’s how we replenish and it’s an automatic replenishment model.
So we’re moving towards that direction. Like currently we’re developing technology to, to auto replenish, you know, the depleted stock levels.
Rehan Syed
Okay. And like this clarification, you, you have mentioned that for this quarter three sales, majority of our revenue come from replenishment.
Rehan Syed
Right.
Rehan Syed
Hello. Am I audible?
Rehan Syed
So hi. Right. I’m just trying to explain how the the model works. Right. There is a made to stock and made to order model. Right. So we are trying to move app stores to be made to order model. We have distributed meets and retailer meals that we have to have through the year. Right. We have a grand distributor meet that happened in May this year and followed.
Nikhil Agarwal
By a host of this retailer meets.
Nikhil Agarwal
Where the distributor call the retailer partners. And this was done primarily in quarter two this year and extended into quarter three as well. Right. Through this mechanism we collect orders through a radius. There is host of networks in the generated site. Right. Plus we have started using digital tools to make this even more efficient. We are trying to leverage the inventory visibility in DMS to plan our inventory management. We are using a tool to do order gathering at the dms, at the distributor meet as well as the retail meet. We have genesis in our retail boss through which we use our weekly remission package for our EBOs as well.
And online also we use Unicommerce as a partner through which we run our daily and weekly replacement cycles. Right. So I mean there is no way to distinguish what is replenishment. I’m just. I thought I will explain the definition of replenishment. We use basically a secondary tracking mechanism to be able to drive our business objectives.
Nikhil Agarwal
Right.
Nikhil Agarwal
It is not make a stock and then try to push the cement into system. We take extra efforts to get input from the market through be it EB or be it online or be it the generate or retailer network and create orders or products according to that.
Nikhil Agarwal
Right.
Nikhil Agarwal
So that is what regulation model.
Rehan Syed
Okay.
Rehan Syed
Yeah. Okay. Okay.
Rehan Syed
Thank you for clarification.
Nikhil Agarwal
Yeah.
operator
Thank you. The next question is from the line of Ankit Kadia from Philip Capital.
Ankit Kedia
Please go ahead, answer three questions.
Ankit Kedia
First is for the quarter we saw 5% plus ASP increase. At the same time you mentioned because of the GST we took a 6% or a price cut. That makes it a nearly 11% on product wise, you know, increase. So where are we getting this increase from, you know, in the market?
Ankit Kedia
Can you come back again with your question?
Nikhil Agarwal
Sure.
Nikhil Agarwal
I saw there was an asp.
operator
I’m sorry to interrupt. There is a background noise from your end.
Ankit Kedia
That is if you’re not able to understand what.
Ankit Kedia
Sorry, can you hear me now?
operator
Yeah, yeah.
Ankit Kedia
We saw a 5% ASP increase. We had a 5% ASP increase in the quarter while at the same time you mentioned that there was 6%, you know, price cut due to GST. So if the GST cut would not have happened, probably the ASP increase would have been 11%, 12% odd. Where are we getting this ASP increase from? the full portfolio?
Nikhil Agarwal
Ankit, I think your understanding is incorrect. GST never gets added to my sales revenue and hence will not impact my ASP. 5% increase in my ASP during the quarter is primarily driven by improvement in mix and it is two types of mix. One is your channel mix and one is the product category mix.
Nikhil Agarwal
So in the product category side our.
Nikhil Agarwal
Sneaker has shown almost doubled versus last year. So that is one key contributor. And on the other side, on the channel side, the more we sell in the marketplace, we and our own brand.com.
Nikhil Agarwal
We are able to get a better.
Nikhil Agarwal
Realization and that results in an improvement in asp. So the GST has nothing to do with my ASP because that’s never part of my sales review.
Ankit Kedia
Understood.
Ankit Kedia
My second question is on the revenue contribution then we saw upwards of 1500 rupees contribution increase from 53% to 58%. While understand on sneaker portfolio which would be sub 1000, you know that contribution increasing from 16 to 21%. What has led to the above 1500 contribution?
Nikhil Agarwal
It sits again as I mentioned, the.
Nikhil Agarwal
Second lever, the channel leverage.
Nikhil Agarwal
So on the online side the realizations are higher and hence the what you call saliency has shifted from 1200 to 1500 more towards 1500 and above. And that’s what is getting reflected.
Nikhil Agarwal
Is it a conscious effort to reduce inventory in thousand to fifteen hundred price point?
Nikhil Agarwal
I mean there’s always an effort to move towards premiumization. So my sneakers are. My realization is higher. The MRP is also higher. So that way the brackets would change towards premium mix.
Nikhil Agarwal
But also a seasonality ankit. It’s also a seasonality mix because quarter three of course we sell higher premium mix. Slightly higher premium than let’s say quarter one which would be more focused for quarter. Yeah, quarter one which would be more focused towards open category.
Nikhil Agarwal
Right.
Nikhil Agarwal
So there would be some changes in terms of that mix on quarter on quarter basis. Also in terms of the premiumization and semi premium salient referring to more on.
Nikhil Agarwal
YOY basis because quarter three FY25 numbers we have and on that basis, you know even in sub thousand price point we have seen a good 400450 bips movement. You know sub thousand. So that I can understand it. It could be you know, due to you know the sneakers where you said IF average is 900950 rupee price point. But you know the gap between thousand and fifteen hundred from 31% to 20% or is a very big change in positioning also in the semi premium category.
Ankit Kedia
Sure.
Nikhil Agarwal
That is also in part to some of the sneakers, you know that has, that have done very well for us in the 1500 plus category.
Ankit Kedia
Right.
Nikhil Agarwal
So their saliency has also added to this mix change. Yeah.
Nikhil Agarwal
And on the like, just, just I Think there is a bit of a confusion when you’re mentioning 900. Right. When we are talking about 900 as the, the ASP for, for sneakers. Right. That is my, my ASP in my revenue. Right. And the table I think you’re referring to is the MRP table. The share of 1500 to 3000 that you’re referring to in the table. That’s the MRP table. So that 900 would be correlated to about an 1800 MRP. Right. So just to, just to clarify these things. Right. So the 900 is my realization. Mrp of the product would be tentatively about 17.
Nikhil Agarwal
1800.
Ankit Kedia
Sure.
Ankit Kedia
Get it. My last question is on your new brand ambassador. Now Kriti Sanon was a brand ambassador for a competitor retailer for three to four years and in that time if I look at that retailer’s revenue, it didn’t move significantly. In fact they lost significant market share. So what made you sign her as a brand ambassador for the new with womenwear product?
Nikhil Agarwal
Well, she, we think she resonates very well with the brand long term brand building aspirations that we have. And, and she has significantly contributed. I mean the campaign has done incredibly well. So I’m not sure of her past or like whatever happened in the previous company, but she’s done extremely well in terms of consumer pull, you know, has been significant as the women category as you know has grown by almost 40%. So yeah, some share of that credibility we will have to credit her also.
Ankit Kedia
Understood. Thank you Nikhil and all the best.
operator
Thank you. A reminder to all the participants that you may please press Star and one to ask questions at this time. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Yes, hi Nikhil. Congratulations for a growth. Nikhil, first question is on Athleisure category. The growth is struggling for quite some time now. So this is the data that is available for some of the publicly listed players and we’ll be competing against various MNC brands over the preferred online channel where all these players are also present. So I just wanted to check how have we positioned our products to sort of gain share within this category.
Nikhil Agarwal
So yeah, no, great question. So firstly, you know, of course this is part of our strategy in terms of leveraging the brand equity that we have created over the years. And as you know we are very, very strong in the tier two and three markets. And now tier one as well is the share is very significant. So this is a very good add on supplementary category to invest for us as a brand. Like it may not be a very good decision for a newcomer, but for a mature brand like us it makes a lot of sense.
And at the same time like the quality and the price point that we have launched, it is very, very attractive. So very high quality at very reasonable pricing.
Nikhil Agarwal
Right.
Devanshu Bansal
As we understand it is a competitive space so it will take some time to build this category up for sure. But the pilot so far has been very encouraging. And also currently the mix that we’ve launched in this is more towards summer apparel. The winter collection is still quite fairly new and like less in terms of SKUs. So as we progress into the summer season we assure that we’re going to get an even better response on top of this. Great sir.
Devanshu Bansal
And second, there is this big GST reduction that has happened for the upcoming launches for the new season launches that will take place now. So I wanted to check will we be working with the lower MRP price points or we are focusing on providing better products at similar pre GST MRP price points?
Nikhil Agarwal
Yeah, the value proposition definitely will increase significantly. Right. So for example the Same shoe for 1500 bucks 1499 will have significantly more value than what it previously had in terms of the new product launches.
Nikhil Agarwal
So the MRT that magic price points that we operate at.
Nikhil Agarwal
Right.
Devanshu Bansal
So they will broadly remain stable and we will be providing better products is the right understanding, right?
Nikhil Agarwal
Absolutely, yeah. So there’ll be more value addition if I can put it crudely like there’ll be definitely more value addition in the same price point.
Devanshu Bansal
Understood.
Devanshu Bansal
And last question from Mayan Nikhil. So when we see from a demand environment post this big GST cut, if you can share your reading from the channel perspective because our growth has definitely picked up but there are certain new businesses like women, sneakers etc which have added to the overall growth they like to like growth in semens footwear would still be relatively lower versus the company average if my assumptions are right. So what’s your reading on the demand environment as of now? Has it improved or it is still a bit of a challenge.
Nikhil Agarwal
So demand has improved to the extent that it normally does a little bit better of course in terms of the season as well in terms of quarter three and after GST cut it has improved a little but I would say it may improve further going forward because it’s still not as per what the industry is expected. And this is for the entire industry like the demand hasn’t picked up the way the industry anticipated it to. And in terms of the growth of what has what we have done is like we’ve added and diversified into newer categories like increasing the share of sneakers and women.
And so these are the ancillary categories that have helped us overcome this demand, let’s say stagnation or whatever you want to call it in the market. And as the GST benefit over time starts flowing into the overall industry demand, it should definitely help us as a tailwind as well.
Devanshu Bansal
So just one small final bookkeeping question from a channel margin perspective. I’m talking about say a retailer or a distributor, how are their margins? Are they on MRPs or there’s a fixed component that they get on selling a pair of shoes. So suppose if The MRP is 1500, so the retailer gets like say whatever amount, 20, 30% of that MRP, or is it like a fixed amount that he gets processing that there?
Nikhil Agarwal
We have different margin structures both for retailers and distributors to take care of by and large their fixed cost. And we do run periodic or seasonal schemes or incentive programs which are targeted both for primary and secondary to drive certain behaviors. Let’s say if I want to propel a women category or I want to propel some sales in a higher price point. So those all are through tactical seasonal schemes. However, there are defined margin structures for both distribution and retail channel to take care of their fixed costs.
Devanshu Bansal
No, so these margins are percentage of MRP or what is the, what do we say, the anchor point?
Nikhil Agarwal
No, they are on a percentage to MRP and not per pair basis.
Devanshu Bansal
And even for distributors or, or for distributors it is on percentage of what you build them.
Nikhil Agarwal
No, no, everywhere it is percentage to mrp.
Devanshu Bansal
Okay, great sir, thank you so much.
operator
Thank you. The next question is from the line of Ali Asar Shakir from Mutilal Oswal Mutual fund. Please go ahead.
Aliasgar Shakir
Yeah, hi Nikhil and Sanjay, how are you? Thanks for the opportunity. Just wanted to understand on the demand side. So, you know, I mean, pretty commendable numbers. We have not seen, you know, similar kind of growth by other footwear companies which have posted or, you know, are likely to post now. So if you can just share some color in terms of, you know, what has driven numbers for us vis a vis others. I, I understand that, you know, online has been a big driving force for you. So if you can just share some more insight over here.
Because online historically we were having multiple models and you know, the outright model that you are selling, you know, didn’t really work. So how have things changed? And you know, I mean, what is the sustainability of this growth?
Nikhil Agarwal
Hi Ali. So like we’ve already called out in the call so multiple initiatives, you know, we’ve taken. So demand certainly isn’t as expected, you know, by the industry. It’s not picked up as much as is evident, you know, from the other company’s results also. So what has worked differently is that a culmination of things like Sneakers, Women Sneakers Portfolio Edition and women’s. We’ve added to the women’s category significantly in terms of the SKU count. And the NPD launches have been very well received along with the brand ambassador. So, you know, that’s worked really well. And apart from that, online, of course, it’s a big focus area.
It’s always been. But we’ve also been very aggressive online. Along with the profitability. It’s not just a burn model for us. It’s profitable, you know, more than I think the other companies that operate on. And of course, we’ve added on to, in terms of GT3 general trade, we’ve added a number of retailers as well. Like 29,000 count is the first time we’ve reached that kind of count. So that has given much more predictability to the cash cow channel for us, which is the distribution channel. Right. So number of these things, it’s not just a. Nothing has changed for us in one quarter is what I’m trying to say.
This is a culmination of the effort for the past two years. You know, like the range, any product range that we need to launch today, the journey for that starts at least a year before. Like, we have to conceptualize and think about the future products that have to be launched. So for example, currently we’re working on 20, 27 range, 26 is already done and dusted. Right. For us, like it’s already in the bag. So that’s how. That’s the cycle, you know, in terms of innovation and product development that we work on. And so whatever has happened in this quarter is of course incredible performance by the sales team.
And at the same time, you know, we were able to execute very well in terms of all the demand that was generated for the articles. Right. So yeah, it’s. It’s just number of things coming together. I would put it like that.
Aliasgar Shakir
It is very useful. So incremental growth, if you can share how much has come from the women category as well as the new sneaker category that you have launched. And I understand this would have come mainly on the online channel, given that is the segment which has grown significantly.
Nikhil Agarwal
So Sneaker has done well across both the platforms, across distribution and online. So distribution, of course, the MRP would be slightly Lower than online. But overall SNKR has been very well accepted across platforms and you know, we don’t see. So we see a healthy growth going forward. So that’s where we’ve invested in terms of capacities as well to make very high end sneakers, you know. And I don’t think many setups exist in India today at least to manufacture these quality sneakers, the one that we’ve invested in.
Aliasgar Shakir
Okay, so could you share in out of this 14% growth, how much would have been your new products? Specifically the women and sneaker category would have contributed to your growth?
Nikhil Agarwal
We don’t share that data, Ali, unfortunately, because it’s like a strategic confidential data. Right, so. Yeah.
Aliasgar Shakir
And that is what has also driven your margins. The, you know, I mean improved realization is. And margin is mainly because of the new products coming at slightly higher price point.
Nikhil Agarwal
Yes, Ali, I would attribute that margin expansion primarily to the mix part. As I mentioned earlier, it is both the reverse product mix which is sneakers and the channel mix which is online. So both played its role as far as material or gross margin is concerned. And we are highly skewed towards quarter three. This is our biggest quarter. So that has resulted in some leverage also fixed cost leverage which has helped us to expand our EBITDA margins.
Aliasgar Shakir
Got it. And going now into the new season, you think, I mean this kind of growth is sustainable with the new products that you have launched and the amount of funnel that you are creating towards creating new products?
Nikhil Agarwal
Again, I think it’s a forward looking statement. I would refrain from commenting on that. However, our sales are like each quarter is a different quarter by virtue of seasonality, festival occasion or marriage season. And as I mentioned initially that quarter four would be. The later part would be more towards open footwear. So we need to take that into perspective both in terms of, in terms of revenue and, and also in terms of product mix.
Aliasgar Shakir
Yeah, I understand that that part.
operator
Mr. Shakir, I’m sorry to interrupt you, sir, I would request you to follow up questions. Thank you. We’ll take the next question from the line of Tejas Shah from Evinda Spark Institutional equities. Please go ahead.
Tejas Shah
Hi. Thanks for the opportunity. So you highlighted sneakers and new category women category as a key growth lever for this quarter. What percentage of our network is currently dealing in these products? Hi.
Nikhil Agarwal
They just upla this site. Every part of our network today primarily would be dealing in these two categories. The extent of penetration of these categories will be different depending on the evolution of the channel. A more modern channel will have a slightly higher share of women’s and sneakers, a slightly traditional channel will have a lower share, but there would be no channel currently in our ecosystem that you would not be focusing on these categories. Does that answer your question?
Tejas Shah
Yeah, it does. So, so basically, as of today, whichever channel fit that we, we understand, the products are placed there. So there is not placement. LED lever is not there from here. Is that the right understanding?
Nikhil Agarwal
Penetration Placement can be wider, placement can be deeper. Right. So those levers will always keep on getting activated. Even if you’re there in three unit stores, you can always be in bondage stores.
Unidentified Participant
Right.
Nikhil Agarwal
So that will never stop, I think. And since these are newer categories from our evolution, I think there will always be scope for further enhancement of these categories. The scale and the quantum of growth will of course over time taper once we reach critical mass. But I think they will continue to be growth drivers for us, at least in the near future.
Ankit Kedia
Perfect. Very clear. Second, what’s the primary kind of value proposition that is working for us in sneakers? Is it largely fashion or functionality or is it performance in price? Obviously, the answer could be all of this. But just as a key proposition, what is working.
Nikhil Agarwal
By the construct of this category? It works on fashion and look and feel more than functionality. That is the reason why consumers buy this category. To look good and not to go for a run. Right. That is the intrinsic nature of this category. So this category first pivots on fashion and look and feel, but also the added we would want to, since we as a brand have been known for our value proposition of comfort durability, we would build these added advantages to every product that we do so that underlying value proposition of campus will never go away.
But of course, this category being a fashion driven category or something you wear to look good, so that fashion element will always be there. And hence we try to take aspiration and inspiration from the best in the industry or from the leading trends of the market.
Ankit Kedia
Sure. And last one, follow up here. In this stage of product NPD evaluation and then acceptance also, how do we get confidence that there is a demand pull or repeat purchase which is getting created and then hence there is a very wider acceptance of the product and not just the initial kind of push growth which is happening.
Nikhil Agarwal
So I mean the first phase of course is to get the products placed. There is a demand generation which we do through our partner network. Our partners can be a distributors, can be a review partner and LFR partners can be an online partner. We take inputs from them in terms of what is the requirements. We create products accordingly. We do our consumer immersions. We understand what is happening in the market, what is happening in other countries, what’s happening in competition, what’s happening from a trend point of view. Then our first objective is to get these products placed in the market to the extent possible.
So there has to be minimum throughput placement to drive understanding of the success of the product. For that we do understanding of feedback from a retailer or a consumer point of view to understand what works well and what doesn’t. Well, we have a very big network of our own stores as well.
Unidentified Participant
Right.
Nikhil Agarwal
300 stores is a very big base for us to do any form of a B testing that we want to do.
Unidentified Participant
Right.
Nikhil Agarwal
So we get that feedback and depending on the feedback and the response, we know whether this will be one of our top iconic products or will it be a great product or it may not be as high a volume as you might have anticipated.
Unidentified Participant
Right.
Nikhil Agarwal
So that is after the first act primarily goes into reach and then depending on the consumer or retailer’s point of view, we take a call on how.
Unidentified Participant
Do we replenish it.
Nikhil Agarwal
But our first will is wide enough to ensure that we get a very strong data input from the market.
Ankit Kedia
Quite clear. Thanks and all the best for coming quarters.
Nikhil Agarwal
Thank you.
operator
Thank you. Due to time constraint, that was the last question for today’s con call on behalf of Campus Activewear Limited that concludes this conference. Thank you for joining us. And in case of any further queries, please reach out to Campus Active as investor relations team@irdampasshoes.com I repeat, irdampassshoes.com once again. Thank you, ladies and gentlemen, and you may now disconnect your lines. Thank you.