Are Campus Activewear Ltd latest results good or bad?

Campus Activewear Ltd's latest results for Q3 FY26 highlight a significant milestone in terms of operational performance, with net sales reaching ₹588.61 crores, marking the highest quarterly revenue in the company's history. The net profit also achieved a record high of ₹63.68 crores, reflecting a substantial increase compared to previous quarters. Additionally, the operating margin expanded to 18.73%, indicating improved operational efficiency. Despite these strong quarterly results, the company faces underlying challenges. The five-year sales growth rate has been notably low at just 2.60% annually, and operating profit growth has similarly lagged at 2.04% per year. This sluggish growth raises concerns about the sustainability of the company's valuation, which currently stands at a premium P/E ratio of 63.48 times, significantly higher than the sector average. The financial metrics indicate that while Campus Activewear has successfully navigated recent operational challenges, the long-term growth trajectory remains a concern. The company's return on equity of 19.33% suggests effective capital deployment, yet the overall growth performance does not align with the elevated valuation levels. Furthermore, the company has seen a decline in institutional investor confidence, with reductions in promoter and foreign institutional investor holdings. This trend may contribute to higher stock price volatility and reduced liquidity. In summary, Campus Activewear Ltd's Q3 FY26 results demonstrate strong operational capabilities in the short term, but the company faces significant long-term growth challenges and valuation concerns. The company saw an adjustment in its evaluation, reflecting the mixed signals from its financial performance.