CAMPUS - Fundamental Analysis: Financial Health & Valuation

Fundamental Rating: 3.6

💹 Financials: Campus Activewear shows decent efficiency with ROE at 17.2% and ROCE at 20.1%, reflecting healthy capital productivity. Debt-to-equity at 0.48 indicates moderate leverage, manageable but worth monitoring. Quarterly PAT declined slightly from 22.2 Cr. to 20.1 Cr., though YoY profit variation stands at 40.4%, highlighting growth momentum. EPS at 4.05 ₹ supports moderate earnings visibility.

📊 Valuation: The stock trades at a P/E of 63.1, significantly higher than the industry average of 38.1, suggesting premium valuation. The P/B ratio is ~9.8 (255/26.0), which is steep. PEG ratio of 17.7 indicates valuations are stretched relative to growth. Dividend yield at 0.39% is modest, offering limited income return.

🏢 Business Model & Advantage: Campus operates in the footwear and sportswear sector, focusing on affordable athletic and casual shoes. Its competitive advantage lies in strong brand recognition, wide distribution network, and positioning in the value-driven sportswear segment. Demand is supported by rising youth population, urbanization, and increasing preference for branded footwear.

📈 Overall Health: Financially stable with strong return ratios and moderate debt, though valuations are stretched. RSI at 49.9 suggests neutral momentum, while MACD at -2.92 indicates mild bearish sentiment in the short term. Long-term fundamentals remain intact, supported by brand strength and sectoral demand, though earnings volatility is a concern.

🎯 Entry Zone: Attractive entry around 230–245 ₹ range, closer to support levels. Current price of 255 ₹ is slightly above fair value. Long-term investors may accumulate gradually, but caution is advised due to premium valuation multiples.

Positive

• Strong ROCE (20.1%) and ROE (17.2%) indicate efficient capital use.
• Moderate debt-to-equity ratio (0.48) ensures manageable leverage.
• YoY profit growth of 40.4% highlights earnings momentum.
• FII holdings increased by 0.16%, reflecting foreign investor confidence.

Limitation

• High P/E (63.1) compared to industry average (38.1).
• High P/B ratio (~9.8) suggests stretched valuation.
• PEG ratio of 17.7 indicates expensive valuation relative to growth.
• Dividend yield at 0.39% offers limited income return.

Company Negative News

• Sequential decline in quarterly PAT from 22.2 Cr. to 20.1 Cr.
• DII holdings decreased by -0.11%, showing reduced domestic institutional support.

Company Positive News

• YoY profit growth of 40.4% highlights strong performance.
• FII holdings increased by 0.16%, reflecting foreign investor confidence.
• Strong brand presence in affordable sportswear and footwear.

Industry

• Footwear and sportswear industry is expanding due to rising youth population and urbanization.
• Industry P/E at 38.1 indicates Campus trades at a premium valuation compared to peers.

Conclusion

Campus Activewear remains a fundamentally strong player in the footwear sector with robust brand equity and growth potential. However, high valuations and modest dividend yield limit upside potential. Entry around 230–245 ₹ is advisable for long-term investors, with cautious accumulation recommended given premium multiples.