Quarterly Financial Performance Surges
Campus Activewear Ltd posted its highest-ever quarterly net sales of ₹588.61 crores in December 2025, a notable improvement from previous quarters. This surge in revenue was accompanied by a corresponding rise in profitability, with PBDIT reaching a record ₹110.26 crores. The operating profit margin expanded to 18.73%, marking the highest level achieved by the company in recent history. This margin expansion is particularly significant given the competitive pressures in the footwear sector and rising input costs.
The company’s profit before tax (excluding other income) also hit a peak of ₹80.56 crores, while net profit after tax climbed to ₹63.68 crores. Earnings per share (EPS) for the quarter stood at ₹2.08, the highest recorded in the company’s recent financial history. These figures collectively indicate a strong operational performance and effective cost management during the quarter.
Financial Trend Reversal and Market Reaction
After a period of subdued performance, Campus Activewear’s financial trend score improved dramatically from -16 to +12 over the last three months, signalling a positive shift in the company’s earnings trajectory. This turnaround has been reflected in the stock’s market performance, with the share price rising 5.81% on the day to ₹269.60, trading closer to its 52-week high of ₹314.95. The stock has outperformed the Sensex in the short term, delivering an 8.08% return over the past week compared to the Sensex’s modest 0.16% gain.
However, longer-term returns remain a concern for investors, with the stock showing a negative 7.47% return over the past year and a significant 29.9% decline over three years, contrasting sharply with the Sensex’s robust gains of 5.37% and 36.26% respectively over the same periods. This divergence underscores the challenges Campus Activewear faces in sustaining growth and regaining investor trust over the medium term.
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Operational Challenges Temper Optimism
Despite the encouraging quarterly results, certain operational metrics remain subdued. The company’s return on capital employed (ROCE) for the half-year period is at a low of 16.12%, indicating that capital efficiency has yet to fully recover. Additionally, the debtors turnover ratio has declined to 9.92 times, the lowest in recent periods, suggesting slower collection cycles which could impact cash flows.
Interest expenses have also risen, with the quarter’s interest cost reaching ₹7.30 crores, the highest recorded. This increase in financial charges may weigh on net profitability if not managed prudently. Investors will be watching closely to see if Campus Activewear can sustain its margin gains while addressing these operational headwinds.
Stock Valuation and Market Capitalisation
Campus Activewear currently trades at ₹269.60, up from the previous close of ₹254.80, reflecting renewed market interest. The stock’s 52-week trading range spans from ₹215.00 to ₹314.95, indicating moderate volatility. The company holds a Market Cap Grade of 3, signalling a mid-tier market capitalisation relative to its peers in the footwear sector.
Despite the recent price appreciation, the company’s Mojo Score remains modest at 48.0, with a Mojo Grade of ‘Sell’ as of 9 January 2026, upgraded from a prior ‘Strong Sell’. This upgrade reflects the improved financial trend but also highlights lingering concerns about the company’s longer-term growth prospects and operational efficiency.
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Sector Context and Competitive Positioning
The footwear industry remains highly competitive, with consumer preferences shifting rapidly and input costs fluctuating due to global supply chain pressures. Campus Activewear’s ability to post record quarterly sales and margins is a positive indicator of its brand strength and operational agility. However, the company must continue to innovate and optimise working capital to maintain this momentum.
Comparatively, the broader footwear sector has seen mixed results, with some peers reporting margin contractions due to rising raw material prices. Campus Activewear’s margin expansion to 18.73% thus stands out as a relative strength, though sustaining this level will require continued focus on cost control and product differentiation.
Outlook and Investor Considerations
Looking ahead, Campus Activewear’s recent quarterly performance suggests a potential inflection point in its financial trajectory. The positive shift in the financial trend score and upgraded Mojo Grade indicate improving fundamentals. However, investors should remain cautious given the company’s lower ROCE and increased interest burden, which could constrain profitability if not addressed.
Market participants will also weigh the company’s short-term outperformance against its longer-term underperformance relative to the Sensex. The stock’s recovery over the past month and week is encouraging, but the negative returns over one and three years highlight the need for sustained operational improvements and strategic clarity.
In summary, Campus Activewear Ltd’s December 2025 quarter marks a significant turnaround with record sales and margin expansion, signalling renewed growth potential. Yet, operational challenges and valuation considerations suggest a measured approach for investors seeking exposure to this footwear player.
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