Campus Activewear shares extend fall to 15% in two days; good time buy this footwear stock?

Street hammered Campus Activewear shares for the second straight session on Wednesday amid lower-than-estimated earnings for the January-March quarter of the financial year 2022-23. The stock cracked about 15 per cent in the last two sessions on a 600 bps year-on-year fall in Q4 margin.

On Wednesday, Campus stock dipped by 8 per cent to touch the day’s low level of Rs 305 per share on the BSE today. The counter is trading near its IPO issue price of Rs 292 apiece at the upper end. The scrip ended over seven per cent lower to Rs 332 apiece on Tuesday on the exchanges.

Campus Activewear, launched in 2005 as a lifestyle-oriented sports and athleisure brand, offers a diverse product portfolio for the entire family. It offers a range of products across styles, colour palettes, and price points.

Campus Activewear Q4 results

The company’s profit came in at Rs 23 crore for the last three-month period of fiscal year gone by, largely unchanged compared with the corresponding period a year ago, as per a regulatory filing.

While its quarterly revenue dipped 1.3 per cent to Rs 347.7 crore.

Campus reported Rs 56.4 crore in EBITDA (earnings before interest, taxes, depreciation and amortization), down 28 per cent compared with the year-ago period. Its margin stood at 16.2 per cent from 22.2 YoY during the quarter under review. for the quarter.

Should you buy it?

According to Motilal Oswal Financial Services, the ongoing weak environment has hurt revenue growth for the whole footwear industry, which was further accentuated by aggressive store rollouts and ad spends.

However, moderation in raw material prices could be the key silver lining in improving margin orpass on the benefit to revive demand, the domestic brokerage said, adding that Campus’s strong market position and healthy sector tailwinds offer a long runway for growth and warrant rich valuations.

Motilal Oswal reiterates a ‘buy’ rating with a target price of Rs 425 per share, implying a nearly 45 per cent upside in the stock price.

Campus Activewear shares: Past performance

Campus Activewear shares have lost over 16 per cent of their value in the last one year, a period in which the Nifty benchmark index has gained around 12 per cent.

In 2023 so far, the stock has dipped more than 25 per cent as against a two per cent surge in the index.

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