scorecardresearchStock Analysis: Is Campus Footwear a 'buy' at current prices?
Campus footware follows a nimble, fashion forward and segmented approach to curate its product lines.

Stock Analysis: Is Campus Footwear a 'buy' at current prices?

Updated: 04 Jul 2022, 01:03 PM IST
TL;DR.
Campus covers more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal 2021, which is the largest market coverage amongst key sports and athleisure footwear brands.

Campus Footwear Ltd is the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021. Company introduced its brand ‘CAMPUS’ in 2005 and is a lifestyle-oriented sports and athleisure footwear company that offers a diverse product portfolio for the entire family. Company offers multiple choices across styles, colour palettes, price points and an attractive product value proposition.

Company covers more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal 2021, which is the largest market coverage amongst key sports and athleisure footwear brands. As a vertically integrated player, companies have a distinct advantage in product creation / design and development while striking a balance between product quality and time to market. Company follows a nimble, fashion forward and segmented approach to curate its product lines.

Flagship collection launch process (spring-summer and autumn-winter)

Company’s staple business which forms the core of the company's fashion forward process. Most of the company’s annual designs are conceptualised and commercialised under these two flagship seasonal launches. Company launches two collections each year, namely, (i) spring summer by February/March; and (ii) autumn-winter by August/September.

Robust omnichannel sales and distribution network

Company has over 425 distributors directly fulfilling orders of over 19,200 geographically mapped retailers at a pan India level. Of these approximately 19,200 retailers, the company's internal sales force of 152 employees has direct field coverage of approximately 11,300 retailers as on December 31, 2021. The remaining approximately 7,900 retailers are covered through its distributor ‘feet on street’ initiative, which further depends on the company's distributor management system, sales force activation application and retailers’ engagement application to streamline company’s engagement with them.

Company’s manufacturing facilities

Company owns and operates five manufacturing facilities across India with an installed annual capacity for assembly of 28.80 million pairs as on December 31, 2021. Its manufacturing facilities have installed capacity to manufacture 4.80 million footwear uppers and 10.80 million footwear soles annually as on December 31, 2021. Company’s manufacturing facilities give the ability to manufacture 37.50% of its requirements of soles and 16.67% of footwear uppers in-house and 100% in-house assembly of all its products.

Campus’s USP

Company sells footwear across the entry-level (MRP at or below 1,049), semi-premium (MRP between 1,050 and 1,499) and premium (MRP at or above 1,500). Company witnessed a growth in volumes sold of its entry-level products from 8.16 million pairs in Fiscal 2019 to 9.44 million pairs in Fiscal 2020 and from 5.00 million pairs in nine months ended December 31, 2020 to 7.15 million pairs in nine months ended December 31, 2021.

Also, the company has been increasing the number of launches in its premium category and this has enabled the company to increase the volume of premium products sold over the years. Company sold 2.13 million, 2.04 million, 2.81 million, 1.56 million and 3.79 million premium footwear products in Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and December 31, 2021, respectively. Company’s Average selling Price(ASP) for its products has increased by 27.77% between Fiscal 2019 and nine months ended December 31, 2021. For Fiscals 2019, 2020 and 2021 and nine months ended December 31, 2020 and December 31, 2021, its ASP per pair was 481, 509, 546, 533 and 615, respectively.

Campus v/s Bata

Campus delivered its best 4th quarter both in terms of top line and bottom-line growth. The revenue from operations increased by 28.1% year-on-year to 352 crores during the quarter, while encountering tailwinds such as COVID19 third wave impact witnessed during January and mid February 2022. EBITDA was 78 crores as compared to 65 crores in Q4 FY21. EBITDA margin stood at 22.3% in Q4 FY22. Net profit for the quarter stood at 39.6 crores with a PAT margin of 11.2%.

Where as Bata witnessed significant improvement in customer sentiments from February, 22, particularly in sneakers, formals and fashion segments. Net sales improved by 12.8% YoY to 65 Crores, while EBITDA came in at, higher by 44.6% over Q4FY21. The company reported net profit of 63 crores, a robust growth of 113.4% YoY. 

Basic ratios to understand better 

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Global perspective of sports and athleisure retail market

Rising health and self-consciousness, desire to lead active lifestyles and to be fit, is encouraging consumers to incorporate sports and fitness activities into their daily routine. This increased participation which has led to a change in market dynamics, leading to an increased demand for athleisure products.

The overall effect can be seen across the globe as it has become very popular to wear sports clothing in everyday life, a trend commonly known as athleisure. Big brands like Nike, Adidas lead the way in support with home grown brands like Anta, Li-Ning, Puma, Campus, Sparx, HRX, Under Armour and others.

Campus’s specific industry segment of sports and athleisure footwear is highly under penetrated, 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.


Shuchi Nahar is a Certified Research Analyst. She can be found on Twitter at @shuchi_nahar


Disclaimer: The information provided is for educational purposes only. Please ask your investment advisor before taking any action. The articles may contain external links, references, and a compilation of various publicly available articles. The author doesn't have any vested interest in the stock mentioned. This is not a buy/sell/hold recommendation.