Campus Activewear reported a 23.8% year-on-year increase in profit after tax (PAT) to ₹150.09 Cr for the financial year FY26, driven by volume growth and improved realizations. Revenue from operations for the year grew 11.4% to ₹1,796.96 Cr, while EBITDA increased 21.9% to ₹314.7 Cr, with margins expanding to 17.5% from 16.1% in the previous year. The Board has recommended a final dividend of ₹1.50 per equity share for FY26, subject to shareholder approval at the 18th Annual General Meeting scheduled for August 20, 2026.

Financial Performance

The company’s operational efficiency improved during the year, with EBITDA margins for Q4FY26 expanding to 19.2% from 18.7% in Q4FY25. The average selling price (ASP) for the full year increased 6.9% to ₹683 per pair, while volume grew 4.2% to 259.7 lacs pairs. In Q4FY26, the company sold 68.2 lacs pairs, a 10.6% increase, with an ASP of ₹668.

Operational Highlights

Direct-to-Consumer (D2C) channels continued to gain traction, contributing 48.3% to total revenue in Q4FY26, up from 44.8% in the same quarter last year. The company maintained its Return on Capital Employed (ROCE) at 22.4% for FY26. Advertisement and sales promotion expenses for Q4FY26 stood at ₹28.8 Cr, compared to ₹25.8 Cr in Q4FY25, supporting brand visibility. The management, including Mr. Nikhil Aggarwal, Whole-time Director & CEO, and Mr. Sanjay Chhabra, Chief Financial Officer, discussed these results in an earnings call held on May 25, 2026.

The Board of Directors, in its meeting held on May 25, 2026, approved the audited financial results prepared in accordance with Indian Accounting Standards (Ind AS). The statutory auditors conducted a limited review and expressed an unmodified report on the financial results. The company changed its method of inventory valuation from First in First Out (FIFO) to Moving weighted average during the year to better reflect consumption patterns, applied retrospectively with no material impact. Additionally, the company noted that the New Labour Codes, effective from November 21, 2025, resulted in no material incremental liability for its own employees.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE278Y01022/1eaadf3d-e4e3-4458-9728-db394cda2fc8.pdf

Kotak Securities has upgraded campus activewear to a Buy rating, setting a target price of ₹310. The brokerage's revised stance follows an all-round earnings beat by the footwear company, signalling improved operational performance.

Upgrade Rationale

The upgrade is underpinned by Campus Activewear's strong earnings delivery, which exceeded expectations across the board. In response to rising input costs, the company has initiated price hikes across its portfolio to offset pressures stemming from raw material and labour inflation — a move that Kotak Securities views as a constructive step toward margin protection.

Revised Estimates and Key Parameters

Despite the upgrade, Kotak Securities has moderated its earnings outlook to reflect the ongoing cost environment. The brokerage has trimmed its EPS estimates by 2–10% to factor in continued input cost pressure. The key parameters of the revised recommendation are summarised below:

Cost Pressures and Pricing Response

Raw material and labour inflation have emerged as notable headwinds for Campus Activewear. The company's decision to implement price hikes across its product portfolio reflects a proactive approach to managing margin pressures. Kotak Securities has acknowledged this strategy while simultaneously adjusting its EPS estimates downward by 2–10% to incorporate the likelihood of sustained input cost challenges.

Summary

Kotak Securities' upgrade of Campus Activewear to Buy, with a target price of ₹310, reflects confidence in the company's earnings trajectory despite prevailing cost headwinds. The combination of an all-round earnings beat and portfolio-wide price hikes forms the basis of the positive reassessment, even as the brokerage trims EPS estimates by 2–10% to account for continued input cost pressure.