Campus Activewear Surges 16% Post Q4-Print, Brokerages Bet On Earnings Growth

Campus Activewear shares rose 16% on Wednesday after the company's March quarter results met expectations.

What Happened: Campus Activewear in its March quarter reported a 42.76% YoY increase in net profit to ₹32.75 crore. Its revenue gained 4.6% YoY to ₹363.86 crore. The company's EBITDA increased 18.3% to ₹66.4 crore. EBITDA margin improved to 18.3% from 16.4% in the previous year. The company sold 57.2 lakh pairs in the quarter, increasing 4% from the previous year. The average selling price (ASP) increased slightly to ₹636 from ₹632 per pair from the previous year. 

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Brokerage Views: Motilal Oswal reiterated its "buy" call with a target price of ₹295. The brokerage sees a 14% revenue CAGR (compound annual growth rate) and 35% profit CAGR over FY24-26. Motilal says the stock has corrected sharply and the company’s strong market position and long runway for growth would result in market recovery in 2H of FY25.

Kotak Institutional Equities also maintained their "add" call with a target price of ₹285. The brokerage raised the earnings per share for FY25 by 5% on faster ramp up in profitability while retaining margin estimates for FY26 and beyond. Company's EBITDA margin beat Kotak's estimates and was attributed to phasing of advertising and promotional spends and lower production overheads. The company's focus on economy segment will help it to recoup market share lost to smaller players and defend market share in the event of liquidation of non-BIS (Bureau of Indian standard) inventory by peers.

Price Action: Shares of Campus Actiwear surged 16% to ₹290.35 on Wednesday morning session. 

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