Campus Activewear – betting on the India Consumption Theme

Q1FY25 Concall Summary

Business Updates

• Volume growth was 3% yoy in Q1FY25
• The mix of footwear has shifted to an extent towards open footwear due to the warmer temperatures
• The ASP stood at Rs 585 in Q1 driven by higher saliency in open footwear

Participants

Vallum Capital

Ambit Capital

Kotak Securities

Motila Oswal

Philip Capital

White pine Investment

QnA

• For MBO in distribution there have been consecutive quarters of volume growth. In online the market place segment has grown by 20% plus. The retail channel in offline EBO’s have seen growth of 8% yoy
• The D2C online segment is showing a degrowth of 5% because apart from marketplace other segments have de grown
• The strategy remains to keep expanding on the touch points. The overall ASP’s have dropped due to much higher share of open footwear category and this is seasonal
• The ASP should not go up in a meaningful manner in FY25
• The whole sports and athleisure category is the fastest growing segment and the anticipation is that there should be double digit growth in this segment in FY25 as well
• The company currently holds inventory of 60-80 days in the distribution channel and that is largely in line with earlier trends
• The higher employee costs is due to higher headcount in front line staff at distribution centers and stores
• The ratio of franchisee stores to company owned at 70:30 shall be maintained going forward
• There are markets in South India and West India that is being actively pursued in terms of new store openings
• The imports from China are largely curtailed and there has been a positive impact with the BIS norms coming in place and it is just a matter of the inventory in stock getting liquidated by this season as the deadline is June 2025 for non BIS
• The companies with turnover of Rs 50 crores do not fall in the BIS guidelines but the endeavor of the government is to keep everyone under the bracket
• Open footwear is a seasonal category selling mostly in Q1 and this will be a strategic category going forward with much better efforts from next year onwards
• The discounting from private smaller players is quite high and a lot of this is also from the liquidation of non BIS inventory
• The portfolio of sneakers have grown by 120% yoy and this is one of the key areas in terms of growth levers for the company along with women’s and kids category
• LFS is a fast growing channel but since it is a nascent contributor to the total revenue it is a complete white space and the idea is to keep adding strong partners on board
• In terms of apparels it is a big category and will take some time before which the management will think of entering. As of now only focused on accessories