Campus Activewear Reports 11.7% Q1 Volume Growth; Projects 17%-19% FY27 EBITDA Margins

Market snapshot: Campus Activewear Limited delivered a resilient start to FY27, posting double-digit volume and revenue growth for the first quarter. Despite passing an 8% retail price hike onto consumers to battle wage and input headwinds, sales volume grew by 11.7% year-on-year, confirming robust structural demand. However, sequential profit contractions after a seasonally strong Q4 caused a minor slip in the company's share price post-announcement.

Data Snapshot

• Revenue from operations grew 12.2% YoY to ₹385.2 crore in Q1 FY27 compared to ₹343.3 crore in the year-ago period.
• Net Profit after tax (PAT) rose 17.7% YoY to ₹26.14 crore in Q1 FY27 compared to ₹22.2 crore in Q1 FY26.
• Sales volume increased 11.7% YoY to 5.71 million pairs during the quarter, while average selling price (ASP) held steady at ₹674 per pair.
• Earnings before interest, tax, depreciation, and amortization (EBITDA) reached ₹62.71 crore, keeping the EBITDA margin flat YoY at 15.9%.

What's Changed

• Revenue from operations increased by 12.2% YoY to ₹385.2 crore in Q1 FY27 compared to ₹343.3 crore in Q1 FY26.
• EBITDA rose by 13.3% YoY to ₹62.71 crore in Q1 FY27 from ₹55.4 crore in Q1 FY26.
• Profit After Tax (PAT) grew by 17.7% YoY to ₹26.14 crore in Q1 FY27 vs ₹22.2 crore in Q1 FY26.
• The average selling price (ASP) stood flat at ₹674 per pair in Q1 FY27 compared to ₹671 per pair in Q1 FY26.

Key Takeaways

• Robust YoY demand drove volume growth of 11.7% to 5.71 million pairs sold in Q1 FY27.
• Calibrated price hikes of 8% in April helped mitigate minimum wage revisions and raw material inflationary headwinds.
• EBITDA margin remained flat at 15.9% in Q1 but is projected to improve to 17% to 19% for the full fiscal.
• Sneakers segment remains a core driver with 30% projected growth for the year, moderating from earlier near-100% rates due to a higher operating base.
• Aggressive retail expansion remains on track with 90 to 100 targeted exclusive store openings in FY27.

SAHI Perspective

Campus Activewear's performance reflects its powerful brand equity in the value athleisure market. Sourcing and pricing actions have neutralised margin pressures. Although raw material costs and sequential adjustments from high-volume school footwear segments restricted Q1 margins to 15.9%, the target of 17% to 19% full-year margins remains highly feasible as price hikes get fully absorbed and festive distributions accelerate.

Market Implications

Steady ASP stabilization and resilient volume growth suggest that the mid-tier footwear sector in India is normalizing post-inflation. Stricter quality standards could squeeze unorganized competitors, allowing structured leaders like Campus Activewear to maintain long-term pricing power and expand their footprint sequentially.

Trading Signals

Market Bias: Neutral

While Campus reported double-digit YoY expansion with revenue up 12.2% to ₹385.2 crore and PAT up 17.7% to ₹26.14 crore, the stock fell 3.31% due to sequential quarterly drops in profitability. A balanced outlook is supported by a stable 15.9% operating margin and strong retail guidance.

Overweight: Footwear, Athleisure

Trigger Factors:

• Successful absorption of the 8% retail price hike in secondary distribution channels.
• Store network expansion reaching the targeted 90 to 100 new outlets in FY27.
• EBITDA margin traction heading towards the guided 17% to 19% band from Q2 onward.

Time Horizon: Medium-term (3-12 months)

Industry Context

The Indian sneaker and sports footwear industry is undergoing structural premiumisation, with casual and lifestyle segments growing significantly faster than traditional athletic wear. Organized players are also benefiting from structural tailwinds as regulatory standards limit sub-scale unorganized manufacturers.

Key Risks to Watch

• Persistently elevated wage bills and labor standard adjustments raising factory-level expenses.
• Rising raw material inflation potentially eroding gross margins if further pricing actions are delayed.
• Severe competition from global value brands stepping up direct-to-consumer digital channels.

Recent Developments

Sanjay Chhabra resigned as Chief Financial Officer (CFO) of Campus Activewear on June 15, 2026, due to personal reasons.

Closing Insight

Campus Activewear has successfully validated its pricing power by implementing an 8% price increase without disrupting its double-digit volume momentum. While near-term margins remain flat due to transition noises, the company's retail network and category-specific targets place it in a strong position for the rest of FY27.

High Performance Trading with SAHI.