Campus Activewe. Q1 FY27 Earnings Call — Analysis (NSE: CAMPUS)
Campus Activewear Q1FY27 revenue rises 12.2% with 11.7% volume growth despite temporary headwinds; management reaffirms full-year 17-19% EBITDA margin band and mid-double-digit revenue growth.
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q1FY27 Revenue ₹385.2 Cr ( +12.2% YoY ) . New guidance — FY27 fy27 revenue growth mid-double-digit . New story: Pricing power and cost pass-through .
Results
Revenue ₹385.2 Cr (+12.2% YoY), volume +11.7%, EBITDA margin 15.9% (stable), PAT ₹26.14 Cr (+17.7%); adjusted for Walmart accounting and franchise model transition, normalized growth was ~4-5% higher.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue | ₹385.2 Cr | +12.2% | yoy · Q1FY27 |
| Volume growth | 11.7% | +11.7% | yoy · Q1FY27 |
| EBITDA margin | 15.9% | +stable | yoy · Q1FY27 · stable |
| PAT | ₹26.14 Cr | +17.7% | yoy · Q1FY27 |
| ASP growth (core Stuck-On) | ~5% | +~5% | yoy · Q1FY27 |
Guidance
FY27 revenue guided for mid-double-digit growth with ASP growth of at least 6-7% from Q2 and volume high single-digit; EBITDA margin expected in 17-19% range.
What management committed to
- Management expects FY27 overall revenue growth to be mid-double-digit, split between ASP growth and volume growth. — mid-double-digit, FY27
- ASP growth will be at least 6-7% from Q2FY27 onwards, driven by normalization of temporary Q1 mix effects and new pricing. — 6-7% at least, FY27
- Volume growth for FY27 will be high single-digit. — high single-digit, FY27
- Full-year FY27 EBITDA margin will be in the 17-19% range. — 17-19%, FY27
- Sneaker category volume will grow ~30% in FY27. — ~30%, FY27
- Company will open 90-100 new stores (FOFO/EBO) by the end of FY27. — 90-100 stores, FY27
- All economical price points that were temporarily left behind will be fully covered by new product launches before the festive season begins. — fully covered, Q2FY27
- No further MRP price increases will be taken, and MRPs will not be reduced even if raw material costs decline; pricing will remain stable. — no further MRP increase and no MRP reduction
- Employee cost as a percentage of revenue will remain proportionate to last year (FY26) for the full year FY27. — proportionate to last year, FY27
- Franchise channel will grow aggressively following the transition to the SOR model, starting Q2FY27. — aggressively growing, FY27
Key themes
Pricing power, distribution transformation, and premiumisation amid transient mix/accounting drags.
How the narrative shifted
- Pricing power and cost pass-through: Management highlights successful 8% MRP hike without volume loss, absorbing RM inflation and minimum wage hikes, and expects no further hikes while protecting margin.
- Distribution expansion and SOR transformation: Transition of 158 franchise stores to SOR model this quarter and plan to open 90-100 stores with multiple master franchise partners will drive better inventory control, partner confidence, and aggressive channel growth.
- Premiumisation via new categories and SKUs: Launches like Elan neo-casual (₹1,899–₹2,599), targeted 30% sneaker growth, and shift of school shoes to Stuck-On are lifting ASP and brand perception, opening new consumer cohorts.
- Temporary headwinds masking underlying momentum: Q1 reported growth was dampened by ~4-5% because of Walmart GT accounting change and franchise model transition, plus school shoe mix dilution; these effects are Q1-specific and will reverse, making underlying growth visible from Q2.
- Pre-building inventory for festive demand: Record production in Q1 and July 2026, backed by record distributor orders, is a deliberate move to ensure product availability during peak festive season and capture maximum demand.
- Macro and input cost headwinds managed: Geopolitical tensions, RM inflation, minimum wage revisions, and LPG supply constraints were absorbed; demand saw some tapering in flood-affected states, but overall outlook remains positive.
Operational commentary
- MRP increase of ~8% across key product categories, effective 1 April 2026, fully passed on to market; accepted with no volume resistance.
- All 158 franchise stores transitioned from outright to SOR model in Q1, giving company control over inventory and discounting; 18 EBU stores opened – highest in 6-8 quarters.
- Launched ‘Elan by Campus’ neo-casual footwear, priced ₹1,899–₹2,599, selling in 100+ own stores and online; initial response very positive, next product drop planned for festive season.
- New logo and brand refresh unveiled, targeted at younger audience; products with new logo since Dec 2025, positively received.
- Highest ever Q1 production and highest monthly production in July 2026 to pre-build festive inventory; distributor meet generated record orders giving good festive visibility.
- School shoes revenue grew ~50% YoY; entire school shoes business shifted from DIP to margin-accretive Stuck-On technology, contributing ~40% of Q1 volume growth.
- Sneaker portfolio volume share at ~12-13% in Q1; targeting ~30% volume growth in FY27 as base scales; production capacity in place.
- Raw material inflation fully absorbed; no further price hike anticipated; management expects RM cost tapering to flow back into P&L.
- Open footwear (sandal) growth lower due to LPG supply constraints during the geopolitical crisis, restricting production on hot-and-cold machinery.
- Targeting 90-100 new store openings in FY27 (FOFO/EBO), pan-India with focus on under-penetrated states (Kerala, Tamil Nadu, Northeast) and adding multiple master franchise partners.
Analyst Q&A
Q. What gives confidence that the 8% MRP hike won't impact volumes or market share, given elasticity in economy segments?
The price hike was necessary to pass on input cost and minimum wage pressures; it has been in place since 1 April with no resistance, and volume grew despite it. The hike is fully absorbed and accepted.
Q. Are you still confident of delivering the full-year EBITDA margin band of 17-19%?
We are 100% confident of delivering that. There is no reason not to deliver the margin.
Q. Can you quantify the impact of Walmart accounting change and franchise model transition on reported revenue growth?
Combined, the two factors had about a 4-5% impact on growth this quarter – ~2.5% from Walmart GT netting and ~2.5% from franchise model change from outright to SOR. These are temporary Q1 effects that normalize from Q2.
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