Campus Activewear is confident of delivering mid-teen revenue growth, with equal contribution from volume growth and ASP increases. Buy for 42% upside: Motilal Oswal

Campus Activewear

Campus is expanding beyond its core category of sports shoes into sneakers, women’s, and kids’ categories.

Slightly weaker 1Q; mid-teens growth key to re-rating

Valuation and view

 Campus is expanding beyond its core category of sports shoes into sneakers, women’s, and kids’ categories. Sharper segmentation, affordability-led positioning, and ongoing operational initiatives are supporting stronger execution and an improving product mix. Channel feedback on execution remains stronger vs. peers.

 We fine-tune our estimates and build in volume/ASP/revenue CAGR of 6%/7%/13% over FY26-29. Improving product mix, price hikes, and recent launches could support stronger ASP growth, while the focus remains on volume growth as the company has linked distributors’ incentives to volume growth rather than value growth for FY27.

 We build in ~155bp EBITDA margin expansion over FY26-29E, with gross margin expansion contributing ~65bp, led by premiumization and mix improvements. The recent price hike should cushion the margins from near-term headwinds from raw material inflation. Accordingly, we model EBITDA/PAT CAGR of 16%/20% over FY26-29E.

 Reiterate BUY with a revised TP of INR310 (earlier INR325), based on 40x Sep’28E EPS.