Campus Activewear sinks below listing price as Street worried about margin

Campus Activewear shares were under selling pressure on Tuesday, a day after the footwear maker reported a weak set of financial results for the quarter ended March 2023 owing to higher operating expenses that ate into its margin. The margin of Campus — which owns the sports and athleisure footwear brand Campus — contracted by 600 basis points on a year-on-year basis.

Campus shares, which debuted on the bourses last year, slumped nearly seven per cent to Rs 335.1 apiece on BSE, sliding below its listing price of Rs 360 apiece. 

The stock made a stellar debut in the secondary market on May 9, 2022, listing at Rs 360 per share — a premium of 23 per cent compared with the upper end of the price range of its IPO.

Campus Activewear Q4 results

The footwear company’s profit came in at Rs 23 crore for the three-month period, largely unchanged compared with the corresponding period a year ago, according to a regulatory filing.
Its quarterly revenue dipped 1.3 per cent to Rs 347.7 crore.

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

What analysts say

According to Motilal Oswal Financial Services, the nearly 50 per cent increase in selling, general and administrative (SG&A) expenses is towards ad spends, primarily towards new product launches and promotions, and some of the increase could be attributed to the doubling of stores and warehousing rent.

Campus Activewear shares: Past performance

Campus Activewear shares have lost five per cent of their value in the last one year, a period in which the Nifty benchmark index has declined 12 per cent.
In 2023 so far, the stock has dipped more than 17 per cent as against a two per cent decline in the index.

About Campus Activewear

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

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