Campus Activewear

Investment case

Mass athleisure footwear

Why this business

Campus is India's largest domestic sports & athleisure footwear brand by volume (FY26 revenue Rs 1,774 cr, ~24 mn pairs implied at ASP Rs 683), selling mass-to-mid price sneakers, running and school shoes through 31,000+ retailers in 850+ districts, ~110 owned stores plus franchise EBOs, and online (D2C incl. brand.com, Amazon, Myntra, Flipkart). D2C (online + offline) was 46.1% of Q1FY27 revenue. Manufacturing is in-house (Paonta Sahib, Pantnagar, Ganaur), which matters under the BIS footwear QCO.

What we believe

1. 01Volume growth has returned: 5.7 mn pairs (+11.7%) in Q1FY27 after only 4% volume growth in FY26; management guides mid-double-digit FY27 revenue growth with 6-7% ASP recovery from Q2 on an 8% MRP hike (Apr-2026).
2. 02Margin expansion path: gross margin 52.9% (+105bp in FY26), EBITDA margin 16.4% FY26 rising toward the 17-19% guided band; MOFSL models 21% PAT CAGR FY26-28.
3. 03Channel mix upgrading: D2C 46.1% of sales (44.4% LY), brand.com +100% YoY, franchise network moving to sale-or-return and master-franchise partners expanding from 8-9 to ~16 states.
4. 04BIS footwear QCO (effective 1-Aug-2024, small-firm deadline extended to 31-Jul-2027) structurally favours domestic manufacturers like Campus over import-led brands and unorganised players.
5. 05Sector tailwind: India footwear market USD 22.7 bn in 2026 growing 9.7% CAGR to USD 47.5 bn by 2034, athletic footwear the fastest segment at ~11.8% CAGR and 32% of the market (IMARC).

Why now

TTM PE 43.4x with the stock down ~20% over 12 months and market cap -19.6% YoY (screener); listed May-2022 at higher multiples, 5-yr average not applicable. EV/EBITDA computed on mcap + Rs 236 cr gross borrowings over FY26 EBITDA. EV/EBITDA 23.7x; dividend yield 0.7%.

Market disagreement

• Relaxo Footwear: Relaxo's volumes have been under pressure in the open-footwear mass segment with weak growth, yet it trades at a premium PE; Campus is growing volumes 12% in the faster athletic category.
• Bata India: Bata is a mature formal/casual franchise with low-single-digit growth and a multi-year restructuring; Campus offers ~13-21% revenue/PAT CAGR (MOFSL) at a similar PE.
• Metro Brands: Metro is a premium multi-brand retailer (incl. Crocs/FILA distribution) at a much higher multiple; Campus owns its brand and factories, giving BIS-QCO protection and 18% ROE at ~39x FY27E.

Position sizing

Core Small cap  1.2% of the PMS on $31 Jul 2026 (August rank 28). Core positions are owned through the cycle for leadership and cash-flow quality.

Catalysts

• Q2FY27 results (Nov-2026): festive-season quarter (Q3 is seasonally largest) with 6-7% ASP recovery and margin move toward 17%+.
• Elan by Campus premium line (Rs 1,899-2,599) scaling across 110 owned stores and online; 90-100 store openings in FY27.
• BIS QCO full enforcement on 31-Jul-2027 (for remaining firms) tightening import/unorganised competition; new CFO Rakesh Thakur effective 17-Aug-2026.

Risks and response

• ASP dilution from school-shoe mix and marketplace accounting kept revenue growth (12%) below volume growth; if the 6-7% ASP recovery does not show from Q2, FY27 'mid-double-digit' guidance is at risk.
• EBITDA margin (15.9%) sits below the 17-19% guided band; wage inflation and new-plant depreciation (Rs 2.5 cr/qtr) plus franchise sale-or-return transition weigh near term.
• Online marketplace dependence (Amazon/Myntra/Flipkart) and rising competition from global brands localising under BIS; stock has already de-rated ~20% in a year and consensus targets (Rs 294-325) assume flawless execution.

Thesis-break conditions

Not stated separately on this page; the risk list carries the monitoring triggers.

Review history

• 8 Sep 2026 · Yash Palod · one-pager in "Why We Own What We Own" (p62) · portfolio as of $31 Jul 2026
• 31 Aug 2026 · Classification in the August top-30: Core

Source: Buoyant_Why_We_Own_What_We_Own_Sep2026.pdf (portfolio as of 31 July 2026), p62. Internal; external publication of these fields is controlled by audience policy.