Campus Activewear reported a net profit of ₹26.14 crore for the quarter ended June 30, 2026 (Q1FY27), marking a 17.7% year-on-year increase from ₹22.20 crore in Q1FY26. The footwear manufacturer’s revenue from operations rose 12.2% to ₹385.20 crore, driven primarily by an 11.7% surge in sales volume to 5.7 million pairs against 5.1 million pairs in the prior-year period. This volume expansion occurred despite an 8% hike in Maximum Retail Price (MRP) implemented in April 2026, indicating strong consumer demand and brand resilience. Management highlighted that the price increase was necessary to offset rising raw material costs and statutory minimum wage revisions, which added approximately ₹5 crore to other expenses.

The Board of Directors approved the unaudited financial results on August 6, 2026, following review by statutory auditors M/s B S R and Co., Chartered Accountants. The results comply with Indian Accounting Standard 34 (Ind AS 34) and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. EBITDA for the quarter stood at ₹62.70 crore, up from ₹55.40 crore in Q1FY26, with an EBITDA margin of 15.9% of total income, consistent with the previous year's quarter. Pre-tax profits expanded by 16.2% to ₹35.29 crore, supported by other income contributions of ₹8.04 crore, up from ₹6.14 crore in Q1FY26.

Financial Performance

The following table summarizes the key financial metrics for Q1FY27 compared to Q1FY26:

Finance costs declined modestly to ₹4.81 crore from ₹4.91 crore in the previous year's quarter. Return on Capital Employed (ROCE) stood at 22.8%, reflecting efficient capital utilization. The company changed its inventory valuation method from First In First Out (FIFO) to Moving weighted average during the previous year; however, management noted that the impact of this change in the current quarter and corresponding previous periods is not material.

Operational Highlights & Channel Shifts

A significant structural shift is evident in the company's distribution strategy. Direct-to-Consumer (D2C) channels contributed 46.1% of revenue in Q1FY27, up from 44.4% in Q1FY26. This growth underscores the effectiveness of the company's digital sales initiatives and expanded retail footprint, which now includes over 31,000 retailers across 850+ districts and 28 states. The launch of the 'Elan' neo-casual footwear category, promoted by brand ambassador Jim Sarbh, has further strengthened product diversification.

Management disclosed that reported revenue growth was temporarily suppressed by two factors: a revised accounting treatment for Walmart (Flipkart and Myntra) where GT charges are now netted off from sales, impacting ASP by approximately 2.5%, and the transition of 158 franchise stores from an outright business model to a Sale or Return (SOR) model. The latter resulted in a de-growth of over 25% in franchise revenue for the quarter due to accounting changes, though it provides better control over inventory and discounting. School shoes revenue grew nearly 50% year-on-year, contributing about 40% to volume growth, though its lower ASP diluted blended margins by 2%.

Outlook and Growth Targets

Management has outlined a confident growth trajectory for the remainder of FY27, with pricing changes and normal seasonal factors expected to improve margins from Q2 onwards. The company expects revenue growth of 6% to 7% from Q2 onwards as temporary headwinds settle. In the sneakers category, Campus Activewear projects growth of 30% for FY27, a moderation from the previous nearly 100% growth rate, reflecting a maturing but still robust demand base. The company is targeting full-year EBITDA margins in the range of 17% to 19%, signaling meaningful margin expansion from the current 15.9% level.

What the Numbers Show

The improvement in net profit was primarily operational, stemming from top-line growth rather than one-time gains. While cost of materials consumed increased significantly to ₹257.10 crore from ₹191.10 crore, this was partially offset by a favorable change in inventories of ₹93.46 crore compared to ₹40.64 crore in Q1FY26. Management noted that despite pressure on select input costs and increased labour costs due to minimum wage revisions, profitability was protected through calibrated pricing actions and prudent sourcing. The consistent EBITDA margin of 15.9% demonstrates the company's ability to manage input cost inflation while maintaining pricing stability. CEO Nikhil Aggarwal emphasized that raw material inflation has been fully absorbed by the recent price hikes, and no further MRP increases are planned as volatility subsides.

Dividend and Corporate Actions

The Board had previously recommended a final dividend of ₹1.50 per equity share for FY26, subject to shareholder approval at the Annual General Meeting. The record date for this dividend is fixed as July 31, 2026. Paid-up equity share capital stands at ₹152.83 crore, reflecting minimal changes from ₹152.80 crore at the end of FY26. The company noted no material incremental liability under the new Labour Codes effective November 21, 2025, and confirmed that no subsidiaries, associates, or joint ventures exist as of June 30, 2026.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE278Y01022/844b1f23-4a9f-4221-b3ff-2015275d44b1.pdf

Campus Activewear has set its sights on mid-double-digit growth for the current year, with the company targeting a combination of volume expansion and average selling price improvements to achieve this goal. The guidance signals a deliberate strategy to drive overall revenue growth through two distinct levers rather than relying solely on volume.

Growth Strategy and Volume Outlook

While the overall growth target is mid-double-digit, the company has tempered expectations on the volume front. Volume growth is expected to come in at high single-digits for the full year — falling short of double-digit territory. This indicates that a meaningful portion of the targeted mid-double-digit growth is expected to be driven by improvements in average selling price rather than unit volume alone.

Key Takeaways

• Campus Activewear is targeting mid-double-digit total growth for the current year.
• Volume growth is projected at high single-digits for the full year.
• The company's growth approach combines volume expansion with average selling price improvement.
• Volume growth is explicitly guided to remain below double-digits for the year.

The company's guidance reflects a balanced approach to growth, acknowledging the limits of volume-driven expansion while leveraging pricing as a complementary driver. The combination of high single-digit volume growth and average selling price improvement forms the foundation of Campus Activewear's mid-double-digit overall growth ambition for the year.