scorecardresearchCampus Activewear: Stock reaches all-time high; trading 90% above its issue price

Campus Activewear: Stock reaches all-time high; trading 90% above its issue price

Updated: 14 Sep 2022, 01:40 PM IST
TL;DR.
Campus Activewear: Analysts expect the Indian footwear market to grow at a CAGR of 8% from Fiscal 2020 to Fiscal 2025 and 21.6% from Fiscal 2021 to Fiscal 2025, making it one of the fastest growing discretionary categories from Fiscal 2021 to Fiscal 2025.
The company reported a consolidated net profit of  <span class='webrupee'>₹</span>28.6 crore in the June-end quarter as against a net profit of  <span class='webrupee'>₹</span>2.6 crore in the year-ago period.

The company reported a consolidated net profit of 28.6 crore in the June-end quarter as against a net profit of 2.6 crore in the year-ago period.

Shares of Campus Activewear have been climbing higher in the last two trading sessions. 

In Tuesday's intraday trade, the stock opened with a gap up of 6.75 per share, at 549 and rose further, reaching a new all-time high of 562.50 on the BSE. After reporting its June quarter earnings on August 17, the stock has gained traction. Since then, it has risen by 30.33 percent to date.

Campus Activewear made its stock market debut on May 09, 2022. The company raised 1,400 crore by issuing shares at a price of 292 per share. The scrip was listed at a premium of 23 percent at 359 on the NSE. Since its listing, the stock has never traded below its issue price.

Domestic brokerage firms advised investors to subscribe to the IPO prior to its listing. In the last three months, the Campus activewear share price has risen from 320.10 to 550.85 levels, representing an increase of about 72.08 percent. The market capitalization of the stock stands at 16,779.6 crore. At current levels, the stock is trading 88.64% above its issue price.

On June 28, global brokerage firm CLSA initiated coverage on the stock with a 'buy' call and a target price of 370/share, Moneycontrol reported.

In a note, CLSA said that "Strong backward integration and design capability, a price-straddle approach in product offerings, and an expanding omnichannel network lend Campus its leading position."

The company is one of the biggest players in the sports and athleisure footwear market, which is seen as a high-growth segment of the industry, it said.

The global brokerage house expects the company’s revenues to grow three-fold and operating profits to rise four-fold, alongside an improvement in margins, over the next three years.

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Stock price movement of Campus Activewear - in the last 3 months

Campus Activewear Limited is the largest sports and athleisure brand in India in terms of value and volume in FY21. The Campus was introduced in 2005 as a lifestyle-oriented Sports & Athleisure(S&A) brand that offers a diverse product portfolio for the entire family and covers more than 85% of the total addressable market for sports and athleisure footwear in India as of FY21, its website shows.

It has a pan-India presence and an established presence in tier 2 and tier 3 cities. As of December 31, 2021, it serviced retail outlets in 664 cities in India, across all 28 states and eight union territories.

The company reported a consolidated net profit of 28.6 crore in the June-end quarter as against a net profit of 2.6 crore in the year-ago period. It reported a 147.83% increase in revenue to 338.3 crore, from 136.5 crore in the April-June quarter of last year.

The promoters hold 74.1 percent of the shares in the company, while foreign institutions raised their stake to 5.3 percent in the June quarter from 3.7% in the last quarter. Regular shareholders own 14.03 percent of the shares, and mutual funds hold 5.95 percent.

Going forward, Analysts expect the Indian footwear market to grow at a CAGR of 8% from Fiscal 2020 to Fiscal 2025 and 21.6% from Fiscal 2021 to Fiscal 2025, making it one of the fastest growing discretionary categories from Fiscal 2021 to Fiscal 2025. The company’s specific industry segment of sports and athleisure footwear is highly underpenetrated, as evidenced by the extremely low footwear penetration per capita as compared to developed economies, and is expected to be the fastest growing segment, with a CAGR of 14% between Fiscals 2020 and 2025, and 25% between Fiscals 2021 and 2025.

An average of 3 analysts polled by MintGenie have a 'sell' call on the stock.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 14 Sep 2022, 01:40 PM IST