Campus Activewear Ltd. (NSE:CAMPUS): Q3FY23 Results Out; Total Income rise 0.4% YoY

Campus Activewear Ltd. (NSE:CAMPUS) is India’s largest sports and athleisure footwear brand, offering a diverse product portfolio. They are the largest sports and athleisure brand in India in terms of both value and volume in Fiscal 2021 and the fastest-growing scaled sports and athleisure footwear brand in India between Fiscal 2019 and Fiscal 2021. With a market share of approximately 15% in the branded sports and athleisure footwear industry in India in Fiscal 2020, Campus increased its market share to approximately 17% in Fiscal 2021. Campus is one of the few established Indian brands in a segment that is primarily dominated by international brands.

Campus Activewear Ltd. has reported its financial results for Q3 FY23 and 9M FY23. In Q3 FY23, the company’s revenue from operations increased by 7.4% YoY to INR 4,656.2 mm, with direct-to-consumer (D2C) exhibiting YoY growth of 45.6%. However, net profit during the quarter stood at INR 483.1 mm as compared to INR 547.2 mm in Q3 FY22, with PAT margin standing at 10.4% in Q3 FY23 (vs. 12.6% in Q3 FY22). In 9M FY23, the revenue from operations increased by 35.0% YoY to INR 11,365.0 mm, with EBITDA standing at INR 1,992.1 mm, demonstrating 20.3% YoY growth. However, EBITDA margin stood at 17.5% vs. 19.7% in 9M FY22, and the net profit during 9M FY23 stood at INR 941.7 mm (PAT margin: 8.3%) as against INR 855.8 mm in 9M FY22 (PAT margin: 10.2%).

The company’s sales volume in Q3FY23 registered at 7.0 mm pairs generating c.5.5% YoY volume growth, and Q3FY23 ASP marginally improved to INR 669 per pair versus INR 657 per pair in Q3FY22. Campus Activewear Ltd. has a pan-India distribution presence with 20,000 retail touchpoints in more than 650 cities, and it has a dominant online presence as a leading footwear brand on Flipkart, Myntra, and Nykaa. The company is also developing its offline D2C presence through large-format stores and a growing EBO network.

Overall, Campus Activewear Ltd. saw a healthy YoY increase in revenue during Q3 FY23, primarily driven by the strong growth in D2C revenue. However, the decline in EBITDA margin for both Q3 FY23 and 9M FY23 is a matter of concern. The company’s sales volume showed a decent YoY growth, and the ASP marginally improved during Q3 FY23. The company’s pan-India distribution presence and dominant online presence are significant strengths that could drive future growth, along with its efforts to expand its offline D2C presence.