CAMPUS - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 3.2

👟 Long-Term Investment Analysis: Campus Activewear Ltd. (CAMPUS)

Campus Activewear is a fast-growing brand in India’s athleisure and footwear segment. While its return metrics and brand positioning are attractive, the current valuation and earnings volatility suggest a cautious approach for long-term investors.

✅ Strengths

Profitability & Efficiency

ROE: 17.2% and ROCE: 20.1% — solid capital efficiency for a consumer brand.

Debt-to-equity: 0.31 — manageable leverage.

EPS: ₹3.86 — supports earnings stability.

Technical Momentum

MACD: +2.54 & RSI: 65.3 — bullish indicators, though RSI is nearing overbought.

Price above 50-DMA (₹271) and 200-DMA (₹273) — confirms short-term strength.

Institutional Sentiment

DII inflows (+0.67%) — domestic institutions showing confidence.

⚠️ Risks

Valuation Stretch

P/E: 73.4 vs Industry PE: 49.5 — significantly overvalued.

PEG Ratio: 20.6 — valuation far exceeds earnings growth.

Book Value: ₹24.8 vs CMP ₹284 — trading at ~11.5x book value.

Earnings Volatility

PAT Qtr: ₹22.2 Cr vs ₹35.0 Cr Prev Qtr — sharp decline.

Qtr Profit Var: −12.5% — margin pressure.

Dividend Yield: 0.35% — modest, not a strong income driver.

FII holding flat (+0.06%) — limited foreign interest.

🎯 Ideal Entry Price Zone

₹250–₹265

Slightly below current price and near key moving averages.

Offers better margin of safety given valuation and earnings risk.

🧭 Exit Strategy / Holding Period

If you're already holding CAMPUS

Holding Period: 2–3 years

Suitable for brand-led growth and consumer discretionary exposure.

Exit Triggers

ROE drops below 12% or PEG remains above 15 for multiple quarters.

Price crosses ₹350–₹370 without EPS expansion (profit booking zone).

Continued earnings decline or institutional outflows.

Partial profit booking near ₹350 is advisable if valuation stretches without fundamental support.

🪙 Dividend Perspective

Yield: 0.35% — modest, adds to total return.

Not a primary driver for holding.

📌 Summary

Campus Activewear is a promising consumer brand with solid ROE and decent growth potential, but its high valuation and recent earnings dip warrant caution. Accumulate near ₹250–₹265 and monitor profitability trends for sustained long-term conviction.

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