Campus Activewear poised for steady growth; Motilal Oswal reiterates 'Buy'

Campus Activewear Ltd remains well-positioned to benefit from strong demand in the sports and athleisure segment, driven by premiumisation, product innovation, and favourable pricing, Motilal Oswal said in a note.

The brokerage said the company's innovative designs, attractive pricing, and wide product portfolio have helped it emerge as a market leader in the fast-growing segment. A reduction in Goods and Services Tax (GST) rates is also acting as a structural demand catalyst by improving affordability and supporting volume growth, it said.

Following a weak first quarter of financial year 2026 (Q1FY26), Campus saw growth accelerate to mid-teens in the second half of calendar year 2026, aided by an expanding retail footprint and increasing premiumisation, Motilal Oswal said. The company’s Ebitda margin rose about 140 basis points year-on-year (Y-o-Y) to around 16 per cent in the first nine months of FY26, supported by backward integration and a richer product mix.

Motilal Oswal believes Campus Activewear to deliver a compound annual growth rate (CAGR) of about 12 per cent in revenue, 18 per cent in Ebitda, and 20 per cent in profit after tax over FY25-FY28. The company has been steadily moving towards higher-value offerings, particularly sneakers, with average selling prices rising from ₹510 in FY20 to ₹639 in FY25 and further to ₹688 in the first nine months of FY26.

Campus has also recently forayed into athleisure apparel on a pilot basis, launching products such as T-shirts, jackets, joggers, and caps. The move is aimed at increasing brand visibility, improving customer wallet share, and strengthening its positioning in the fast-growing athleisure segment, while also enhancing store productivity, the note added.

The brokerage expects the contribution from e-commerce to remain stable at around 36 per cent over FY25-FY28, with the online channel likely to grow at a compound annual rate of about 12 per cent, supported by rising demand and the company’s strong presence on major platforms.

Going forward, Ebitda margins are expected to expand further to the management’s guided range of 17-19 per cent by FY28, aided by scale benefits, premiumisation, and efficiencies from backward integration.

However, Motilal Oswal has trimmed its Ebitda estimates for FY25-FY28 by 1-2 per cent due to higher advertising and promotional spending related to the company's new brand identity and apparel expansion. It has reiterated its 'Buy' rating on the stock with a revised target price of ₹305, down from ₹320 earlier.