Campus Activewear Q4 FY26 profit up 26%, margins rise

Key takeaway from Q4 and FY26

Campus Activewear Ltd (BOM:543523) reported higher revenue and profit in Q4 FY26, supported by volume growth and a rising contribution from sneakers and direct channels. The company also highlighted faster product launches, backed by an integrated manufacturing setup that shortens time to market to 80 to 100 days. Management commentary pointed to sustained focus on marketplaces over the past three years, alongside its own brand.com operations.

At the same time, the quarter reflected some near-term pressure points. Gross margin slipped marginally year-on-year in Q4 due to goods transportation (GT) charges impact in the online business. The company also flagged inflationary pressure in raw materials and minimum wage impact, which required price hikes across the product range. Inventory days increased by about 5 to 6 days in FY26, stretching the cash conversion cycle.

Q4 FY26: Profit growth outpaced revenue

In Q4 FY26, Campus Activewear’s revenue from operations increased 12.3% year-on-year to INR 455.63 crore. Net profit jumped 26.01% to INR 44.14 crore, while profit before tax (PBT) rose 23.46% to INR 58.78 crore. EBITDA grew 15.4% to INR 88.5 crore from INR 76.7 crore a year earlier.

Margins improved despite the marginal gross margin dilution. EBITDA margin stood at 19.2% in Q4 FY26 versus 18.7% in Q4 FY25. The company also reported a PAT margin of 9.6% for Q4 FY26, an improvement of about 100 basis points year-on-year.

Sales volume increased 10.6% to 68.2 lakh pairs in Q4 FY26 compared with 61.7 lakh pairs in Q4 FY25. Average selling price (ASP) rose 1.5% to INR 668 per pair from INR 658 per pair.

Gross margin dip and the GT charges accounting impact

Gross margin was reported at 52.1% in Q4 FY26, marginally lower than 52.3% in Q4 FY25. The company attributed the change mainly to the GT charges impact in the online business.

Campus also noted that ASP growth was lower in Q4 due to changes in accounting for GT charges in the online business. Separately, in earlier FY26 commentary, the company explained that channel partners began directly charging transportation costs to customers, lowering both revenue and freight and commission expenses by about INR 8 crore. It also said overall revenue growth versus last year was adversely impacted by around 2% due to this business model change.

Channel performance: Online led Q4 growth

The company said Q4 FY26 performance was driven by 18.9% growth in the online channel and 5.5% growth in the distribution channel. For the full year FY26, it reported distribution growth of 10.5% and online channel growth of 9.8%.

Management also stated it has increased focus on marketplace operations over the past three years, expanding partnerships with platforms such as Amazon and Snapdeal, in addition to its own brand.com.

FY26: Revenue growth and stronger gross margin

For FY26, Campus Activewear reported revenue from operations of INR 1,774 crore, up 11.4% year-on-year. The company sold approximately 26 million pairs during FY26. It reported an average selling price of INR 683 for the year, up 7% year-on-year from INR 658.

FY26 gross margin was 53.5% versus 52.3% in FY25, indicating expansion at the full-year level even as Q4 saw a marginal dip. FY26 EBITDA was reported at INR 314.7 crore, with an EBITDA margin of 17.5%.

Sneakers, women and kids: Mix improvements highlighted

Campus said its sneaker portfolio showed strong momentum and contributed significantly to overall volumes, reflecting changing consumer preference. Management added that the sneakers portfolio grew by over 100% year-on-year.

The revenue mix between men and women and children in Q4 FY26 stood at 78% and 22%, compared with 81% and 19% in the same quarter last year. For the full year, the men versus women and children mix was 79% and 21%, compared with 80% and 20% in FY25, indicating a gradual improvement in women and kids contribution.

New product launches and manufacturing speed

The company said it successfully launched nearly 250 new SKUs in FY26, aimed at strengthening product mix and brand identity. It also highlighted a fully integrated manufacturing ecosystem, which enables a faster 80 to 100 day time to market. This capability is positioned as an advantage for introducing new designs quickly and responding to trends.

Campus also said it is not constrained by capacity, and it plans to increase production to 8 to 9 lakh pairs per month to support continued growth.

Costs: Advertising, input inflation and wages

Advertisement and sales promotion expenses rose 11.4% year-on-year to INR 28.8 crore in Q4 FY26 from INR 25.8 crore in Q4 FY25. Alongside marketing costs, the company flagged inflationary pressures in raw materials and minimum wage impact, which required price hikes.

It also reported that inventory days increased by about 5 to 6 days in FY26, contributing to a longer cash conversion cycle.

Balance sheet and return ratios

Campus Activewear reported a strong balance sheet with return on equity (ROE) of 18.1% and return on capital employed (ROCE) of 22.4%. In another FY26 update, it also referenced return ratios such as ROCE of 16.6% and ROE of 18% as at the end of a quarter.

December quarter update: Higher D2C contribution

For the December quarter of FY26, Campus reported a 37% year-on-year rise in net profit to INR 63.68 crore, compared with INR 46.47 crore in the corresponding quarter of the previous year. Revenue from operations increased 14.33% to INR 588.61 crore from INR 514.8 crore. Total income stood at INR 594.11 crore, up 14.58%.

The company reported sales of 8.3 million pairs during the quarter, an 8.6% increase year-on-year. It also stated that direct-to-consumer (D2C) channels contributed 50.6% of total revenue.

Summary table: Key reported numbers

What investors may track next

The reported numbers show that Campus Activewear combined volume growth with margin improvement in Q4, even as the online GT charges treatment affected reported gross margin and ASP movement. Investors may track how the company manages raw material and wage inflation, and whether inventory days normalise after the FY26 increase.

The company’s stated levers include continued marketplace expansion, a growing sneaker contribution, and faster product refresh through an 80 to 100 day time to market. It has also indicated plans to lift production to 8 to 9 lakh pairs per month, which is a key operational marker to watch in upcoming quarters.

Analyst and peer context

The data shared also indicated that one analyst has assigned a sell rating to the stock. Listed peers mentioned include Bata India (1.71%), Sreeleathers (0.03%), and Liberty Shoes (2.12%), without additional context on the figures.