Campus Activewear Limited

Campus Activewear Limited the largest sports and athleisure footwear brand in India in terms of value and volume in Fiscal 2021. They introduced the brand 'CAMPUS' in 2005 and are a lifestyle-oriented sports and athleisure footwear company that offers a diverse product portfolio for the entire family. They cover more than 85% of the total addressable market for sports and athleisure footwear in India as of Fiscal 2021. Company launched 583 new designs in Fiscal 2021. The product portfolio is extensive with 1,433 active styles for men, 241 active styles for women and 485 active styles for kids and children as on December 31, 2021. They offer one of the widest portfolios of footwear products among sports and athleisure footwear brands in India in terms of SKUs as of September 30, 2021. Company has over 425 distributors, covering 28 states and 664 cities, directly servicing and fulfilling orders of over 19,200 geographically mapped retailers at a pan-India level as on December 31, 2021. Of these approximately 19,200 retailers, the internal sales force of 152 employees has direct field coverage of approximately 11,300 retailers as on December 31, 2021. The remaining approximately 7,900 retailers are covered through the distributor 'feet on street' initiative. Company has omnichannel presence and for upto Q3 FY22 from company's total sales 63.44% from trade distribution and 36.56% from D2C sale. They own and operate five manufacturing facilities across India with an installed annual capacity for assembly of 28.80 million pairs as on December 31, 2021. The manufacturing facilities have installed capacity to manufacture 4.80 million footwear uppers and 10.80 million footwear soles annually as on December 31, 2021. The manufacturing facilities give us the ability to manufacture 37.50% of the requirements of soles and 16.67% of footwear uppers in-house and 100% in-house assembly of all the products. As per financial performance, Campus has posted total income/net profits of Rs 596.69 Cr / Rs 38.60 Cr (FY19), Rs 734.12 Cr / Rs 62.36 Cr (FY20), Rs. 715.08 Cr  / Rs 26.86 Cr (FY21) and Rs. 843.95 Cr / Rs 84.80 Cr (Q3 FY22). So company has posted good result over last couple of years except FY21 pandemic year. They have posted an average EPS of Rs. 1.34 and average RoNW of 14.68% for last three fiscals. Issue is priced at a P/BV of 22.05 as per NAV of 13.25 on 31.12.21. If we attribute latest earnings of FY21 on fully diluted equity post issue, then asking price is at a P/E of around 331 and as per FY22 annualised earnings P/E is around 79, which looks fully priced. As per RHP, comparison between listed players is shown in above table. On BRLM's front, four lead managers are associated with this IPO, and have handled around 62 IPOs in last three fiscals. From last 10 IPOs, 3 is opened below issue price and remaining are opened above issue on the day of listing. As of now, 3 are trading below issue price and other are trading above issue price. ( As on 21.04.22) As per financials, Campus Activewear Limited has shown good growth, RoNW is 8.6% and P/E is respectively 331 and 79 as per FY21 and annualised FY22 earnings, which looks fully priced. Company is in footwear sector and created good brand visibility. Also this sector is expected to grow at good rate and company may beat sector growth. Performance of BRLMs are good. So, we give SUBSCRIBE rating for this IPO and one may hold it for long term in portfolio.

• 1 Hari Krishan Agarwal
• 2 Nikhil Aggarwal