Campus Activewear stock soars over 12.5% after block deal worth ₹100 crore
Shares of Campus Activewear jumped by 12.6% in today's intraday trade, reaching ₹275.80 apiece. This uptick in shares came after 40,65,000 shares of the company changed hands in a block deal window on Wednesday.
Campus Activewear, a prominent sports and athleisure footwear company in India, saw its shares jump 12.6% in today's intraday trade, reaching ₹275.80 apiece. This uptick in shares came after 40,65,000 shares of the company changed hands in a block deal window on Wednesday with an average price of ₹245 apiece.
The buyers and sellers, however, were not known immediately. The total value of this transaction was ₹99.59 crore, as per the NSE data.
The company, known for its trendy and stylish athletic footwear, has been grappling with challenges including weak demand, rising competition, and poor financial performance, which have exerted downward pressure on its shares.
Since November 2022, the company shares have been on a downward spiral, closing each passing month in red. In the current month so far, they are down by 5.37%.
The company made its stock market debut on May 09, 2022, after raising ₹1,400 crore through its initial public offering (IPO). Taking the current trading price of ₹261 apiece, the stock is trading with a 10.61% discount to its issue price of ₹292 apiece.
The company's recent December quarter earnings (Q3FY24), which were released on February 09, left shareholders disappointed as the company reported a 48% drop in its standalone net profit at ₹25 crore, while the revenue from operations came in flat at ₹472 crore, owing to a change in channel dynamics.
However, on a sequential basis, the revenues grew by 82.5% QoQ owing to improved consumer sentiments during the festive season coupled with strong performance in online sales. Its ASP stood at ₹681 in Q3 FY24 compared to ₹669 in Q3 FY23.
Earlier, domestic brokerage firm Kotak Institutional Equities initiated coverage on the stock with an 'Add' rating and set a target price of ₹290 apiece.
The brokerage anticipates significant growth in India’s sports and athleisure (S&A) footwear market, projecting a 15% CAGR from ₹150 billion to ₹400 billion. During this period (FY2023–2030), the segment's share in the footwear market is expected to increase from 17% to approximately 25%.
This growth is attributed to various factors, including the low penetration of S&A footwear, particularly among women and children, the rise in disposable income alongside evolving lifestyle preferences emphasising fitness, and enhanced accessibility through both offline and online channels. Additionally, the emergence of new brands contributes to the market's growth trajectory.
Furthermore, the brokerage notes the dominance of S&A brands in the global footwear landscape over the past decade. Implementation of the Bureau of Indian Standards (BIS) regulations in India may deter cheap imports and foster the transition from unorganised to organised sectors, thereby stimulating further growth in the market.
The company owns and operates five manufacturing facilities across India, with an installed annual capacity for assembly of 35.8 million pairs as of December 31, 2023.
At 01:30 pm, the stock was trading with a gain of 6.90% at ₹261.90 apiece.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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