Ladies and gentlemen, good day and welcome to the Campus Activewear Limited Q1 FY 2026 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * then 0 on your touch-tone phone. Before we proceed on this call, let me remind you that the discussions may contain forward-looking statements that may involve known or unknown risks, uncertainties, or other factors. It may be viewed in conjunction with other business that could cause future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements.
The Campus Activewear's management team is represented by Mr. Nikhil Aggarwal, Whole-Time Director and CEO, and Mr. Sanjay Chhabra, CFO. I now hand the conference over to Mr. Nikhil Aggarwal, Whole-Time Director and CEO. Thank you, and over to you, sir.
Good evening, everyone. Thank you all for joining us today for our Q1 FY 2026 Earnings Call. We reported a revenue of INR 343.3 crore for the quarter, successfully navigating a challenging macro environment and managing two very significant internal transitions. First, stabilizing the operations at our new raw material warehouse, which took longer than anticipated, as we consolidated the operations of three warehouses together. Second, the successful implementation of SAP. I'm happy to report that the blackout period for SAP was shorter than we anticipated, allowing us to resume normal business operations in the second week of April 2025. To mitigate potential disruptions during the blackout period, we proactively stocked up the inventories with our channel partners during Q4 end to ensure minimum impact on secondary sales in the distribution channel. However, online channel sales got impacted during this transition, resulting in sales loss during the first fortnight.
During the quarter, our volume declined by 11.6%. However, the impact was largely offset through higher ASP, higher margin product mix. The decline in volume was driven by muted demand in the online channel and lower sales of entry price point DIP school shoes, slippers, and sandals in the distribution channels. Part of the volume loss of DIP shoes was mitigated through upgrading our consumers to EVA school shoes. The reduction in slippers and sandals volume was primarily in the entry price point segment with lower than average margins. Our revenue grew by 1.4% during the quarter, driven by 8% growth in the distribution channel, 20% growth in the large format stores, and partly offset with the transition-led degrowth in the online marketplace channels.
We focused on driving premium product sales, in particular sneakers, which positively impacted our ASPs, which increased by 14.7% YOY from INR 586 in Q1 FY 2025 to INR 671 during Q1 FY 2026. This highlights our commitment to premiumization while ensuring competitive pricing even amidst macroeconomic headwinds. We continue to enhance our product portfolio by launching over 50 new value-for-money styles across men, women, and children's categories. These new offerings cater to various family occasions, reflecting our commitment to meeting the diverse needs of our consumer base. Notably, our sneaker category achieved a remarkable 150% growth. We sold 550,000 pairs versus 220,000 pairs last year, reinforcing our dedication to providing stylish, high-quality footwear at accessible prices. We also saw an improvement in our gross margins, which expanded by 210 basis points YOY from 53.3% to 55.4%.
During the quarter, we hosted our largest ever distributors meet Shoecase 2025, celebrating two decades of shared growth and our commitment to the future. The feedback we received for our latest focus collection has been overwhelmingly positive.
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Enhancing our growth visibility and raising hopes for demand recovery in the upcoming quarters, I'm excited to share that our new digital campaign, Air Capsule Pro, featuring Siddhant Chaturvedi, has resonated very well with the youth. This campaign showcases the versatility of our flagship Air Capsule Pro collection and has generated significant interest amongst our target audience. As we speak, we have further augmented the in-house manufacturing capacities for Upper by commencing the production of Upper at our Paonta Sahib facility in Himachal Pradesh, starting 1st August 2025. This strategic move is expected to bolster our manufacturing efficiency and help us in meeting the peak of demand. We are optimistic about the trajectory moving forward and remain committed to delivering value to all our stakeholders. Thank you, and now I hand over the call to our CFO, Mr. Sanjay Chhabra, to take you through more details.
Thank you, Nikhil, and good evening, everyone, and thank you for joining us on Q1 FY 2026 Earnings Call for Campus Activewear Limited. Our operational revenue grew by 1.2% year-on-year to INR 343 crore in Q1 FY 2026, largely benefited by higher distributions, which has registered a growth of 8.6% and growth in large format stores, while the online channel had a degrowth of 8%. The company sold approximately 5.1 million pairs of footwear in Q1 FY 2026, down by around 11.6% year-on-year. The average selling price grew by 14.5% year-on-year from INR 586 per pair to INR 671 during Q1 F 20Y26. The gross margins improved from 53.3% during Q1 FY 2025 to 55.4% during the current quarter. The improvement in gross margin is largely driven by a higher share of premium products, including sneakers, as well as overall cost efficiencies. Our EBITDA for Q1 was INR 55.4 crore.
The EBITDA margin stood at 15.9% during the quarter, an improvement of 10 basis points versus last year. PAT stood at INR 22.2 crore during the quarter, and PAT margin stood at 6.4%. The drop in PAT margin from 7.4% last year to 6.4% during the current year is driven by higher depreciation on our capacity enhancement-related investments in Haridwar and Ganaur during the second half of the last year. With this summary, I will now conclude my remarks and open the floor to the moderator for Q&A session. Thank you.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line of Gaurav Jogani from JM Financial. Please go ahead.
Thank you for taking my question. Sir, our first question is in regards to the decline in the online sales. Actually, we lost out the initial part of your commentary because there was a lull. If you can tell us why the online sales have declined sharply and how much of this is recoupable in the coming quarters?
Hi G aurav. In the online sales, two things happened. We basically had a very large transition of the raw material warehouse, which I called out. We consolidated three warehouses into one, and this is the largest transition the company's ever made in the history of the organization. The benefit, of course, is going to be immense, and we've already started seeing the benefits of this transition from quarter two onwards. There's never honestly a good time to make this transition because the business also has to run as usual. We took that call to do it during quarter one, which is the slower time compared to the season time.
During this time, while we made very good progress and the distribution channel had enough inventory to get the growth, we unfortunately could not supply enough materials for the online-led marketplace, and that is where we sort of lost out on the growth over 15 days, I would say, 15 to 20 days.
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Hello. Sorry about this. Did you hear me so far?
I listened till the part that you said that meltdown on sales for 15 to 20 days. That is where I heard you last.
Yes, yes. That's basically what happened in the online channel. Otherwise, we would have gotten at least high single-digit growth in the online as well.
Okay, okay. You said that, you know, already you are seeing the benefits of the warehouse consolidation. If you can highlight what kind of benefit this consolidation is giving you, are you talking more in terms of a cost side? Are you talking more in terms of better distribution? How is this warehouse consolidation helping you?
Sure. This warehouse, so far, we had three warehouses for raw material issuance to basically all the plants and our fabricators. These three warehouses had a combined capacity of not more than 80,000 pairs a day, right? That's the maximum we've ever done from these three. The new warehouse gives us a capacity of, in a mature state and a high throughput state, we can easily go up to 200,000 pairs a day. It's basically doubling of the capacity of the throughput. What this does is this de-bottlenecks the entire supply chain where we can now comfortably, and you know, we can also do a lot of advanced issuance of the material to the respective plants wherever required.
Okay. It allows you to store a lot more raw material, which you can then give to the vendors for processing, and then your production can increase effectively. Is that the right understanding?
Actually, i t adds a lot of bandwidth for us to feed our 60+ fabricators who, in turn, make upper for us throughout the year and also during the peak season when we have a higher demand.
Sure. Okay. L ast question is with regards to the other expense line item. I think this quarter we also had a higher ad spend, and plus, the negative leverage is impacting the margins. Otherwise, if you look at the overall margin depth of this, would you be confident of at least touching 16%- 17% margin this year, given that now the closure is behind us and we expect the sales to recoup going ahead?
Yeah, Gaurav. We continue to aspire to go back to the old days. 17%- 19% is what we have been highlighting already. That's what we aspire to achieve.
Sure. Thank you. That's all for me.
Thank you. We have our next question from the line of Priyank Chheda from Vallum Capital . Please go ahead.
Yeah. Hi, sir. Thank you. Nice to interact again. Sorry to point out we have been guiding for double-digit growth. We have been guiding for 17% - 19% margins. We have been waiting also long for that delivery. Somehow, either it's industry or internal to Campus that the delivery miss is something which is very consistent. Could you please highlight by when should we actually see what you have been guiding in terms of delivery happening on the P&L also?
Hi, Priyank. Yes, you are right on delivery misses on occasion. If you look at it on a consistent basis and on an annual basis, you will see that there is improvement on the EBITDA margin front. If you look at full-year FY 2025 versus FY 2024, and if you look at the consistency we are trying to maintain quarter on quarter, the numbers are there. As I said to answer Gaurav in the earlier question, yes, we aspire to go back to 17%- 19% trajectory. We are trying to sort of work on all the building blocks which are going to take us there on a sustainable basis. These transitions, both SAP implementation and consolidating RM warehouse, are part of that. We are always keeping in view one year forward. How do we augment the capacities to take care of the future demand growth? These are building blocks.
Yes, it is taking a bit of time. I agree with that.
Hi, Nikhil here. I'd just like to add that, like Sanjay said, Sanjay clearly pointed out there has been significant movement. The quarter four and quarter three last year were very good for the company, and after a long time, we were able to demonstrate that kind of performance. This was a one-off. We also did not honestly anticipate in quarter one this kind of time frame for the warehouse consolidation because it was massive. It was hundreds of crores of inventory which were shifted over a very short period of time, which had to be uploaded into the SAP. It was a very complex affair, which we are very proud of. It's a tough transition, and honestly, it has opened up a lot and de-bottlenecked the entire supply chain completely. We are very positive for quarter two onwards, and we've had a good start in quarter two.
We are very hopeful of the recovery going forward.
Sure. We also hope for that. We have been well-wishers. What I have failed to reconcile is that if we had planned such a large movement, we could have guided the contents, or we could have guided the investors in the previous call itself that there would be this disruption. On the business front, in the times where industry is struggling for a better sales growth, we can't afford for 15, 20 days of sales loss. I think that could have been also planned well. Just an observation, right? I'll come to the second question. The second question is on in the times when there is a 15, 20 days disruption, in the times where industry is struggling, we have still continued to invest into the advertisement and promotion. That is that we couldn't see a decline or a degrowth over there.
I'm sorry, but I'm asking this question again while I had asked this question in the last call also. We spend top dollar in terms of percentage revenue when compared to all the other footwear brands that are listed in India. How do we reconcile this for this quarter, for the full- year that ROI is getting translated into the revenues? Help me with what's the thought process behind spending such a large amount in advertisement and promotions?
Okay, Priyank. Of course, needless to say that A&P spends always have a lag in terms of realization, in terms of sales. As we mentioned in the opening remarks, this degrowth in online was a channel-specific phenomenon which required a certain set of finished goods. The degrowth was not universal. We have shown a growth in distribution of around 8%, which is pretty decent. That's what it's all execution-led. It was a part of plan. We did upstock inventory in Q4. Despite that, we were able to service all the orders post-SAP go live, which resulted into a growth in distribution channel. A&P spends are like channel agnostic. The investments are ahead of curve, and the impact also comes in the, with a, let's say, a quarter lag, right?
Hopefully, we'll use that.
I'll interrupt you, Mr. Priyank. May I please request you to rejoin the queue as there are several participants waiting for their turn? Thank you. We have our next question from the line of Shraddha Kapadia from SMIFS Limited . Please go ahead.
Hello. Am I audible?
Yes, please go ahead.
Thank you for the opportunity. My question is with regards to the ASP. We have seen an increase in the ASP. Is there any specific region where there has been more ASP increase, or is it overall, which is there also in terms of the consumer buying patterns? If you could just give a brief about the recent Q2 demand trends and the consumer buying patterns, that would be great.
Sure, sure, sir. Firstly, with respect to the ASP, we have had an excellent response in terms of our sneaker portfolio, number one. Even on the shoes portfolio, the sport shoes as well, which is, you know, so our INR 1,500+ portfolio share saliency has gone up to all 50%+ for this quarter, which is the highest ever we've done. There are two, three reasons for that. One is our disproportionate focus on the sneaker category, which is definitely extremely premium and very high ASP. That is, again, a reflection of our commitment to premiumization. This is on actually not a very large base. We've sold just 550,000 pairs of sneakers. It's still like scaling up, and we have big plans for this category going forward.
Secondly, we did slow down on the lower margin, lower MRP DIP school shoes and some bit of sandals and slippers, which were not very margin accretive and very, very low value. That is one portfolio which we sort of scaled down slightly. It's a combination of both where we have gained disproportionately on the ASP front.
Thank you, sir. Any regional trends which can be observed?
Not really. It's across the board. The regional saliency for us is also very similar to the previous quarter. No real change in terms of it's across the board.
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Yeah. I just highlighted the macros were like, okay, they weren't like the best in terms of the demand situation, but they weren't also too bad. We were hoping for, you know, that's why we were able to do even 8 or 9% growth in the distribution. If you look at the other results of the peer set, right, clearly, you can see there is stress in terms of demand. As a brand, we've been focusing disproportionately on branding and the premium portfolio and the quality of shoes, which is giving us this kind of growth even in this market. That's how we are looking at the market right now.
Sure, sir. Just one more question from my end. What is the proportion of non-BIS inventory in the system, and do you continue to expect the 20 to 40 basis points of market margin drag for FY 2026?
Shraddha, the proportion has significantly reduced, and that, again, has started reflecting in our gross margins as well. On the one side, there is an ASP increase, and on the other side, there's a cost efficiency, which means that now we are getting lower hit in terms of liquidation of non-BIS inventory and all as compared to the same quarter last year and as compared to last quarter as well. That has started reflecting on the margins. We don't see much of stress there beyond the range what we have already highlighted in the past.
Sure, sir. That was quite helpful. Thank you so much.
Thank you. We have our next question from the line of Umang Mehta from Kotak Institutional Equities . Please go ahead.
Yeah. Hi. Thanks for the opportunity. Nikhil, if I were to just, you mentioned that D2C online, if this disruption wasn't there, then it would have grown by around high single digits, right? Assuming that this wouldn't have happened, you are saying that your overall shares would have grown in something like 6%, 7%. Is that correct?
Yes. High single digits, Umang. That's right.
Even the company level sales?
At company level, that's correct.
Understood. Any color you can share on how June, July have been so that we come to know about how the recent trends are and what to kind of expect going ahead?
Without diverging into numbers, I can share with you that we have recovered in terms of the sales in July, and we expect a decent quarter two. We're basically in line with our budgets, like internal budgets, what we've aligned. We don't see any challenge there.
Understood. Just a clarification, the 17 %- 19% guidance that you gave, that includes your other income, is it, in terms of the EBITDA margin that you're calculating?
Yes.
Understood. Thank you so much.
Thank you, Umang.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press * and 1. Anyone who wishes to ask a question may press * and 1. We have our next question from the line of Sameer Gupta from India Infol ine. Please go ahead.
Hi. Good evening, everyone, and thanks for taking my question. Sir, firstly, on the BIS part, I just want an update here. This is not on the non-BIS inventory that we have. This is on the overall industry piece. There was an expectation that Campus would be one of the bigger beneficiaries of this disruption that we saw in BIS jobs. Now, as you see it on the ground, are all the related benefits to this accrued to us already, or more can be expected?
Hi, Sameer. We've just actually started seeing the benefits, to be honest. The benefits are yet to be fully materialized as there is still inventory in the system, non-BIS inventory for all the brands. It's not just limited to us. The regulation says that everyone has to dispose of the inventory before June 2026. Everyone's taking their time to do that. That's not really a big issue now with anyone as the overall inventory is, I believe, finite and not that significant. The benefit has started coming in, but I believe the bulk of it is yet to come.
Got it. Why I ask is because now with the evolving geopolitical situation with China, first of all, is there a potential for, you know, whatever benefits that could have come to even reverse hypothetically, or now the ecosystem has changed completely and whatever is done is done, and you don't think this situation will reverse?
You mean the BIS to be reversed?
If factories outside China start to get approvals, etc., then we'll be back to square one, right?
Not really. I mean, see, they're already getting approvals, but they're getting approvals for the MNC brands because they don't really have any manufacturing in India, and they're only dependent on China, Vietnam, Indonesia, such countries. They are getting very exceptionally approved. For basically, our biggest competitor were two lines of thought here. One is the fake goods, the fake brands that would come into India from China. That was a very big volume that was being brought here, and that sort of also disrupted our market. That piece has really, really shrunk completely, more or less. There was, of course, other importers, the non-branded ones. On both fronts, we have seen significant decline in the imports into the country. I don't see any reason why the government would want to reverse this.
There are other ways of, I'm sure they have better solutions to this, but I think it's a great move. BIS will be very beneficial for the entire industry in terms of even employment generation, which we're already seeing the benefits of. Even us, like we are going all out in terms of expansion, right? We're also putting up new plants and new facilities and expanding our production. Clearly, we see a lot of leverage going forward.
Got it. These fake brands and non-branded importers that you're talking about, they still have a sizable inventory of non-BIS products. That is why the benefits are yet to accrue. Is that a correct understanding?
There is some, definitely. I mean, see, one is obviously there's a seasonality to it also. We believe that the demand wasn't that great in quarter one, and that is a reflection that you will see in the other results also of other companies. Despite that, of course, we lost out due to some internal transitions on the online side, but the distribution piece has shown growth, right? 8%, 9% growth. In the season time, of course, this will be accelerated, and we believe that in the next one or two quarters, the benefits will become even more apparent of the BIS.
There are no fresh imports happening of these fake brands. That is for sure.
If anything is getting done by other means, I don't know. Legally, yes, nothing is getting imported now.
Okay. No worries. Second question, if I may, on this 15 to 20-day disruption that you mentioned, I am not able to really understand what has happened. One, how is it that this disruption is only affecting the online channel? Was it specific to certain SKUs that demand came in on the online marketplace and you could not supply, or you couldn't anticipate stocking up, or you didn't have enough capacity to stock up that much? What exactly happened?
Sure. Basically, we firstly had sufficient stock on the distribution side. Of course, there was some disruption on the distribution also, but distribution was less affected because they had a healthy inventory base already. On the online side, we got impacted mostly on these specific articles which were high movers and the outright sales in the marketplace, right? Both areas got affected with respect to because they were already on a lower base of inventory. That is where the impact was more significant.
You planned to do this so you could have stocked up on those items, right?
So, yes.
It was an unplanned exercise, yeah.
No, you're right. Two or three, you know, basically, two big transitions were happening at the same time, the SAP and the warehouse. While we honestly thought that this could have been done in over a week's time, it took much longer, the warehouse transition, because of the complexity, which we did not really anticipate to take that long. It was definitely a miss. I would call it out that it could have been done slightly better. Whatever it is, it is in the past now, and we are very hopeful of recovering completely from here on in the balanced three quarters.
Got it. That's all from me. All the best for the future.
Thank you. Thank you.
Thank you. We have our next question from the line of Akshen from Fidelity. Please go ahead. Akshen, we will request you to unmute yourself and go ahead with the questions.
Yeah. Sorry. First question was around the ASP. We've seen a sharp uptick this quarter. I don't know if this is just, you know, a rise of inventory we sold or something that we should see steady state going forward. That's question one. If you could answer that, then I'll go to the second one.
Yeah. Hi, Akshen. Sanjay this side. ASP, the high ASP is a combination of two things. One is the higher saliency of sneaker portfolio, which has a higher MRP range. That saliency or that portfolio has shown a growth of around 150%. The second is the lower sale of slippers, sandals, and DIP school shoes. DIP school shoes were selling, it's an entry-level school shoe, which was selling at a price point of roughly INR 400, which we consciously sort of descaled or scaled down and tried to move consumers to the EVA-based sole, which is a lighter school shoe, but at a higher price point.
It's a combination of, one, the sneaker portfolio, and second, the lower saliency of the school shoes, DIP school shoes, plus sandals and slippers, which was a conscious call on sort of vacating some entry price point, which were delivering us less than the average margin. Going forward, I would say that sneaker, the base which we have formed in this quarter, I mean, from here on, there will be a consistent growth quarter on quarter. Of course, we should not be comparing it versus last year, but now this 500,000 - 700,000 pairs would become a base for every quarter because our Haridwar 2 facility is also now up and running at full scale.
The ASP may not be as high as this every quarter, but it will certainly be.
Higher than last year.
Higher than last year, yeah.
Okay. Second was just your comments around the disruption. From the earlier call, you had mentioned that the SAP, you had a go live on 4th of April . That's not really disrupted the quarter too much, no?
Yeah. The disruption here was more on account of raw material warehouse consolidation, which feeds our five plants and 60-odd fabricators. If there is a sudden demand on an article, and if I'm unable to issue the raw material for that article, I just can't mold it and service that demand. That's where our online channel got impacted. SAP go live was scheduled for 4th. By 7th, all the modules were up and running. By 10th, it was BAU for our largest channel, which is distribution. The disruption was more on account of backend supply chain, which is prominent there.
Just a last thing from my side, more of a suggestion. We had a call fairly late in May. This disruption on warehousing would have been a non-headwind to you. It hasn't changed what we see in our outlook, but just around the quarter, we were coming off two decent quarters, three decent quarters. If we were changing logistics, we did call out, but we didn't call out disruptions over there. If there were disruptions, you would have seen the disruptions by May. It's out of good practice. I think we should have just called it out. That's what you might say. Thank you, guys.
Great. Thank you.
Sure. No disruption. Yes. Thank you.
Thank you. A reminder to all participants, if you wish to ask a question, you may press * and 1. Anyone who wishes to ask a question may press * and 1 on their touchstone telephone. We have our next question from line of Prerna Jhunjhunwala from Elara Securities. Please go ahead.
Thank you for the opportunity. I just wanted to understand the difference between primary sales and secondary sales growth this quarter.
Prerna, we had a fair amount of secondary sales growth, largely reflected in our distribution growth. We are working in the key markets. We are working on a sort of replenishment model, the big markets in the north and also in the west. We have seen a decent secondary sales traction.
Because we lost 15, 20 days of sales, that would largely be on the primary side, I assume. I just wanted to get clarity whether this would be covered up in the forthcoming quarters.
We have been mentioning since the beginning that we have shown a growth in distribution around 8.6%. The distribution channel we were able to upstock the inventory in line with the demand. The disruption impact was not that severe. That's how we have been able to grow. The replenishment thing continued to work. Wherever in distribution, whatever little degrowth is, that is on account of a lower sale of school shoes, DIP, sandals , and slippers, which again was a conscious call based on those price points and low margin articles.
H ow would you?
Just to add here, Preena, by the end of the quarter one, we were able to start building up the stock again, right? The disruption issue is behind us completely. That's why we were able to see a good momentum July onwards. I would say that this issue is past us now.
Would you like to call out for any positives coming in from preponement of festive season in Q2 this year?
I think it's too early to call that out. We're, of course, fully geared up for the season. We'll see how it goes.
Okay. Thank you, sir, and all the best.
Thank you.
Thank you. We have our next question from the line of Aliasgar Shakir from Motilal Oswal Financial Services. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Just want to understand the demand outlook. Now, I mean, as you did mention that the inventory of non-BIS inventory in the industry has come down quite significantly, which was hurting us. Also, you know, overall macro scenario was also not very great. In that backdrop, how do you see now the demand outlook? Also, from a demand driver point of view, you know, distribution side, what steps we have taken and all that, do you think we should be able to still do our double-digit growth target that we had, or with this Q1 disruption, I think now that would come down?
Hi, Ali. No, we are absolutely on track with the double-digit guidance. There is no change in that. We've basically been executing apart from this one issue that we had on the warehouse. We are executing very well on the front-end side. We are currently doing, we've had a fantastic distributor meet where we've collected orders till December. We have a very high visibility of the order pipeline. Even at the secondary level, as currently we're doing the retailers' meet, as we speak, they're going on across the country. The response is very good on the newer articles and the entire portfolio. The core portfolio is very well accepted. We have a good visibility. It's all about execution now. That's basically what we're doing. As you know, the challenges that were there in terms of the warehouse, we've opened it up completely.
At least now we have a very good throughput available from the warehouse side. We don't see any other challenges in the season.
Got it. This is very useful. If you can share any insight in terms of the initiatives we are taking to ramp up distribution and the new territories that we are planning to add.
Yeah, like I mentioned, these are all new initiatives. The number of retail meets that we're doing are highest in the country by far by any other brand by significant margin. I can't share the numbers, but it's in over 150+ retailer meets that are happening across the country. Plus, the distributor meet that happened was at a very large scale. These are industry-first initiatives. Nobody else has done this before. Along with that, we're giving them a highly curated portfolio of very good designs, and value proposition is very high as always that we maintained. Plus, we're also launching with some new branding, which you will see in the coming times in the season. A lot of stuff is happening in terms of the brand visibility, marketing, sales front. Of course, in the regions of southern India and western India as well, we maintain the momentum.
South has also grown for us in quarter one, YOY, right? There is a very good execution push at ground level in terms of distribution. That's where you see the growth as well in quarter one.
Just last question on the margin front. You mentioned the 17 %- 19% is where you aspire. Can you share timelines? I mean, should we expect this year to achieve that level of margin, or else by when should we expect? What kind of growth do we need to achieve that?
Ali, of course, we do plan, and the plans are always slightly above what we have already delivered in the last year. 17%- 19% is a range, I would say, for a period greater than one year. I would not sort of omit that, yeah, that upper band is what we will be achieving this year. That's the range we are aspiring. It is a combination of multiple factors. If everything falls into place, we can deliver in that range. That range has some building blocks which we are working on.
It should be linear, right? It should not be backended, right? We should see regular improvement year on year.
Yeah.
Understood. Very clear. Thank you so much.
Thank you. The next question is from the line of Jasmine from VT Capital. Please go ahead.
Hi, team. My question is largely on the nearer term. My understanding is that quarter two may have some seasonal impact from the rain, plus the inventory disruption as well as the rising ASPs that may have caused a little bit of a slump in the volume as well. Would it be fair to assume that H2 is when a proper recovery would be seen?
Hi, Jasmine. We've covered this already. Quarter two, like I've called out, is on track, right? Whatever that translates into H1 numbers, given how quarter one went, clearly we are on road to recovery, and we still have, like I've guided, to a double-digit growth for this year. We're absolutely on track with that. That's all I can point to here. There was, of course, an abnormal amount of rainfall this year, but I don't see a disruption beyond any point for that. It's manageable, and we've been able to do fairly well so far.
Okay. My second question is on the unorganized competition. Do you have anything to call out on that front? A follow-up or a related question on that would be how is the pricing in the market right now? Is there a lot of price cutting happening in the lower price point?
Yes, that is true. Actually, on the ground, a lot of the unorganized players are cutting prices a lot, and there is intense competition on the ground. That's where we are taking some steps to mitigate that and reduce that impact to as low as possible. We've also done some schemes, and some initiatives have been taken on the front end to push sales. As long as we're also obviously monitoring secondary inventories very carefully, there is a movement on the secondary side completely. It's basically the sale is pretty much in line with how we anticipate so far. There is a push on the ground. There is definitely quite intense competition at the moment.
Great. Thank you so much. All the best.
Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press * and 1. Anyone willing to ask a question, you may press * and 1 on their touchstone telephone. We have our next question from the line of Chirag Shah from White Pine Investment Management. Please go ahead.
Yes, thanks for the opportunity. Two questions. First, on this disruption due to warehousing that convergence was happening, what kind of volume or revenue would you have lost because of that? You would have tried to recoup it in the subsequent period of the quarter. Either in terms of number of pairs or in any form, you would like to call out?
Yeah, Chirag, as we mentioned, the impact was there primarily on the online channel, which is roughly 35% saliency. I mean, had everything been normal, we would have shown a bit of growth there as well. It would have an impact of maybe around INR 100 million-INR 120 million of revenue there, which on an overall basis would have added maybe 3%- 4% growth.
Great. Just a clarification, you indicated there was a 50% growth in sneakers, if I heard it correctly.
Yeah, that's right, versus last year's same quarter.
Is this a new trend, or was last year more of an abnormality because of the growth?
Sorry. We were not very, I mean, geared up for the sneaker portfolio. We have set up new stitching lines in the Haridwar facility, mainly to cater to the sneaker segment because that's a trend or that's a category which was evolving, and we were late entrants there. That was a gap in our portfolio, which we have bridged from H2 of last year.
Yeah. Last question was on this non-BIS inventory in general, in the system. Is it from based on your understanding, can you call out what is the impact of this either on revenue as well as on margins, either way in general for industry? Because it's a kind of a black box beyond the point, and your understanding would be far far superior than ours.
As Nikhil mentioned, the non-BIS inventory is primarily, or let's say half of that is nothing but the fakes of the MNC brands which used to get imported from China. That has been stopped completely, which would mean that it should result in a demand for the local players, right? That's what it is. The government giving time to liquidate such inventories till June 2026 means that wherever it is parked, those channels still have the inventory. Once those inventories are completely exhausted, it would lead to a demand for the local players. By this time, since last one and a half year, if the imports are banned, it is presumed that a large part of that inventory is already liquidated. It should translate into the demand.
Now it's all a matter of guesswork that how much of that demand will come to Campus and how much will go to the unorganized players. It's now a level playing field for all, and it becomes an execution game for us to try to grab as much share as possible.
What I was trying to understand is, if I take FY 2020, if I had a full-year base, would it be right that for an organized player like you all, as an industry I'm more referring to, there would be a 5%- 7% impact on revenue coming because of this inventory of non-BIS inventory? Is it more impacting you on the margins front because there is more supply and you have to compete in the market as a player? How is the impact in your assessment on the financials?
It's very difficult to put a number to it. I would only say that it can impact us on the positive side in terms of revenue because the imports have been banned. On the negative front, as a cost, there was a cost of liquidating non-BIS inventory ASAP, which we have been doing for the last, I would say, five quarters since the BIS regulation is in place. Like all other players, we are also now left with very little of that stock, and hence the cost side impact is very minuscule.
Would it be right to admit that F25 margins would be significant or whatever reasonable impact on this? In a sense, it will help us understand how big it could be the impact for F25 as a whole I'm referring to because there could be possibly variations, etc., etc.
It would be very difficult to open up.
Good enough. Fair point, sir. Okay, thank you and all the best.
Thank you. In the interest of time, we will request all the participants to restrict to one question per participant. If you have a follow-up question, we request you to rejoin the queue. We have our next question from the line of Rajesh Agarwal from Moneyore . Please go ahead.
Sir, can you throw more light on the sneaker business on the higher base of INR 500,000 or INR 700,000? Can we grow quarter to quarter 25% or yearly 40%? You said the ASP will not go up. If the sneaker business goes up, ASP should go up from here also, no? That's my question.
Okay. I mentioned earlier, I mean, if you are comparing versus last year, the numbers would look great. If you get into a quarter-on-quarter comparison, 500,000 pairs per quarter is a decent number. From here on, our growth will be normal, let's say 15%, 20%, right?
Okay.
The kind of saliency we will have for sneakers. Yes, sneakers command a INR 200- INR 250 ASP difference versus our regular sports shoe category. To that extent, ASP accretion and margin accretion would get reflected in the numbers.
Can you come back again on the last thing? What do you feel about the margin accretion?
That's what I'm saying, that to the extent we continue adding sneaker portfolio, it's nothing but premiumization. To that extent, the ASP accretion and margin accretion related to that price difference would accrue in our numbers.
Please, can you quantify that? Will it be how much, INR 250 or INR 300 or whatever?
You can put, let's say, 10% growth on my current quarter's numbers. That's what it will grow now.
Okay. Our sneaker price begins from what rate, sir? What price do we begin starting range?
It usually begins at INR 14.99 and above.
Do you think there's a scope of the ASP to increase precisely from here on or not?
Now we're at INR 6.71 now.
I mean, from the sneaker portfolio, certainly, the ASP will grow, right?
14.99 is the MRP. Our realization would be after the channel margin.
Of course, yeah.
Of course, there is still a scope of ASP increasing, you know?
Yes, there is still a scope with it.
When we are talking about this guidance, we're talking about volume growth also and ASP increase also?
We are talking about revenue growth, and that, I mean, everything is built into it.
Understood. Okay. Any other drivers for the growth and the margins?
Of course, product, sneakers, and from a category perspective, like segment perspective, women's share is another driver. From a geography perspective, south is the driver.
Understood. Sir, I've been using your product. It's very helpful.
If you have issues, Mr. Rajesh, maybe please request you to rejoin the queue.
Okay, thank you.
Thank you. We have our next question from the line of Yash Kansara , an individual investor. Please go ahead.
Hello. Good evening. Can you hear me, sir?
Hi, Yash. Yes, we're going.
Okay, sir. Sir, actually, I did some groundwork, ground research. I talked to two to three retailers. Sir, what I've noticed is that if you take the, I am talking about sports shoes, if you take the segment from INR 500 - INR 2,000, then people usually refer Campus, which is good, and congratulations for that. Sir, second thing, if you take the premium segment, which is from about INR 2,000 to INR 2,500, people are usually tilted to other international brands. Sir, my question is that do you have any strategy or are you planning, do you have any framework for branding to gain some market share in higher premium segment?
Sure, Yash. Great question. Yes, that's exactly what we're working on. Sneaker is one portfolio which is helping us bridge that gap. INR 2,000 plus onwards, we have a fantastic range of sneakers, which is already there. There's a lot more in the pipeline, which is about to get launched. That is one big piece of this puzzle, which will help us premiumize, INR 2,000 and above, right? There are some other steps that are being taken as well, which it's a bit too early to share right now on the call. Rest assured, we are working on our INR 2,000+ portfolio very aggressively.
Okay, sir. My short question is that the. Can you?
Thank you, Mr. Yash.
Okay. Thank you.
Thank you. Ladies and gentlemen, in the interest of time, that would be the last question for today. On behalf of Campus Activewear Limited, that concludes this conference. Thank you for joining us. In case of any further queries, please reach out to the Campus Activewear Investor Relations team at ird@campushoes.com. You may now disconnect your line.