Campus Activewear Limited ($CAMPUS)

Ladies and gentlemen, good day, and welcome to the Campus Activewear Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand over the call to Mr. Hirel Keniya from EY LLP.

Yes. Thank you, Yashasri. Good evening, everyone. On behalf of Campus Activewear Limited, I would welcome -- I welcome you all to the company's Q4 and FY '26 conference call to discuss the performance of the company and to answer your questions, we have with us the management team comprising of Mr. Nikhil Aggarwal, Whole Time Director and CEO; Mr. Sanjay Chhabra, CFO; and Mr. Uplaksh Tewary, COO. Before we proceed this call, I would like to draw your attention to the fact that, today's discussion may contain forward-looking statements that are subject to various risks, uncertainties and other factors, which would be beyond management's control. We kindly request to bear in mind that there might be uncertainties, while [indiscernible] such statements. Please note that this conference is being recorded. We would now like to start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I would now hand over the conference call to Nikhil sir for his opening remarks. Thank you, and over to you, sir.

Good evening. Thank you all for joining us today for our quarter 4 and FY '26 earnings call. We continue to demonstrate strong performance in quarter 4 and FY '26 and are proud to report a 12.3% Y-o-Y growth, driven by 18.9% growth in our online channels and 5.5% growth in our distribution channels. This reflects the strength of our execution across key levers expanding distribution reach, accelerating online channels and enhancing product mix, all of which contributed to a higher average selling price. Our ASP grew by 7% Y-o-Y to INR 683 driven by robust demand for our sneaker range and a healthy product mix in women and kids' category, reinforcing Campus as a trusted brand for the entire family. As a leader in making premium sneakers accessible, we remain steadfast in our commitment to democratizing design-led high-quality footwear. Our sneaker portfolio continued to deliver strong momentum accounting for a rising share of total volumes and reaffirming growing consumer preference. Our accelerated time to market of 80 to 100 days enabled by a fully integrated manufacturing ecosystem gives us a distinct edge in rapidly introducing new designs and silhouettes while seamlessly aligning with market demand. We strengthened consumer engagement through the launch of nearly 250 new SKUs in FY '26. The premiumization trend remains firmly in our favor, well supported by a richer mix of premium SKUs and a strong response to our refreshed product offerings. During the year, we sharpened our brand identity with the launch of a new brand logo. And the same was [indiscernible] through a very successful brand meet with our distributors last week. At the core of this identity shift, our 3 outward arrows, symbolizing multiple parts and possibilities, reinforcing the idea that growth and self-expression are not bound to a single direction reflecting the Move Your Way philosophy, the refreshed identity celebrates freedom of movement as an extension of personal ambition, culture and individuality. With a global design perspective rooted in the spirit of Indian youth, it represents a generation that values authenticity and the freedom to shape its own journey while marking Campus' evolution into a culture-led brand, spanning fashion, sports and everyday lifestyle. While we prioritize profitability over aggressive retail expansion this year, our exclusive brand outlet network remains steady at 300 stores. Meanwhile, our upper manufacturing facilities at Paonta and has stabilized, and we have commenced production at Pantnagar unit. Currently, these units are delivering an approximately 200,000 average monthly output which is likely to double by end of FY '27, enabling us to efficiently serve rising demand across sneakers and other fast-moving categories. Despite onward capacity expansion, we maintained disciplined working capital management, resulting in a strong balance sheet and healthy return ratios with return on equity and return on capital employed at 18.1% and 22.4%, respectively. In the context of evolving geopolitical developments and inflationary pressure in certain raw materials, we took tingly calibrated price actions across the entire range to safeguard margins. Looking ahead, we remain firmly focused on our long-term strategic priorities, driving innovation, staying agile and maintaining a consumer-first mindset. With the product portfolio anchored in technology design responsiveness and evolving lifestyle needs, Campus is well placed to further strengthen its position as a trusted everyday brand for young Indians. Thank you. And now I hand over the call to our CFO, Mr. Sanjay Chhabra to take you through more details on the quarter 4 and FY '26 performance.

Thank you. Good evening, everyone, and thank you for joining us on Q4 and FY '26 earnings call for Campus Activewear. First of all, I'll take you through the quarter 4 performance. Our revenue from operations grew by 12.3% year-on-year to INR 456 crores, largely benefited by higher revenue in the online channel, which has registered a growth of around 19% and distribution channel, which has grown by around 5.5%. The company sold approximately 6.8 million pairs during this quarter and the average selling price grew by 1.5% year-on-year to INR 668 per pair. The revenue mix between men and women and children categories stood at 78% to 22% versus 81% and 19%, respectively, in the last quarter -- last year same quarter. Our gross margins were at 52.1% in quarter 4 FY '26 versus 52.3% in quarter 4 FY '25. Marginal dilution in gross margin is driven by the GT charges impact in online business, which is largely offset by better channel mix, which is higher online saliency. Our EBITDA for quarter 4 was at INR 88.5 crores. The EBITDA margin stood at 19.2% during the quarter, an improvement of 50 basis points versus last year, driven by volume and revenue growth. Our PAT for quarter 4 was at INR 44.1 crores. The PAT margin stood at 9.6% during the quarter, an improvement of 100 basis points versus last year, once again driven by revenue and volume growth. Now I'll take you through the full year performance. Our operational revenue for the full year FY '26 grew by 11.4% to INR 1,774 crores in FY '26, largely benefited by higher distribution, which has registered a growth of 10.5% and online channel, which grew by 9.8%. The company sold approximately 26 million pairs during the whole year FY '26. The average selling price grew by 7% year-on-year from INR 658 to INR 683. The revenue mix between men and women categories and children stood at 79:21 versus 80:20, which shows a 100 bps improvement in women and children category. Our gross margins were at 53.5% in FY '26 versus 52.3% in FY '25, an improvement of 120 basis points driven by product and channel mix. Our EBITDA for the year FY '26 was at INR 314.7 crores. The EBITDA margin stood at 17.5% in quarter -- sorry, during the year, an improvement of 145 basis points versus last year, driven by revenue growth. Our PAT for FY '26 was at INR 150.1 crores. The PAT margin stood at 8.4% versus 7.5% last year, an improvement of 80 basis points driven by higher EBITDA margins. Our balance sheet remains strong with return ratios that is return on capital employed at 22.4% and return on equity at 18.1% as of March. With this summary, I will now conclude my remarks and open the floor to the moderator for Q&A session. Thank you.

[Operator Instructions] We'll take our first question from the line of Aditya Soman from CLSA.

Sir, two questions from me. So firstly, if I look at the product mix in the pyramid that you share, compared with 4Q '25, we've seen a significant increase in the number of the shoes sold below INR 1,000. So one, could you just explain of what happened? Why was there a shift between INR 1,000 to INR 1,500 [indiscernible]? And second, is this pricing is MRP or is it the price [indiscernible] actually sold?

Okay. This price is -- the price which the company realized is, which is our average selling price. And if you're referring to the last slide of the inverter deck and the increase of -- or the movement between different price points, that is a reflection of the corrections in MRP, which happened post the GST change.

Understand. So in other words, basically, we've got many of the pairs of shoes that were priced above 1,000 and now price below 1,000, and that would be the meaning of that.

Yes, because 12% GST got revised to 5%.

Correct. Correct. Okay. No, that's very clear. And second question, just in terms of online mix improving, can you just throw a little more light on, what's really helped that?

Uplaksh, this side. On the [indiscernible] operation, of course, you are aware that for the last 3 years, we have increased our overall focus on marketplace option as compared to the outright business. So the growth levels have been on 3 front, of course, apart from the Flipkart being the biggest partner for us, we have made a lot of improvements in our revenue mix with Amazon, Snapdeal as well as our own brand.com. So there have been further very aggressive growth that we have had on these platforms as well, along with our larger players continuing to grow. Hence, the highest sale in the last quarter.

Next question is from the line of Gaurav Jogani from JM Financial.

The first question is with regards to the price increase. Nikhil had mentioned that we have taken a price increase because of the raw material prices increasing. What was the kind of price hikes that we have taken?

Gaurav, so I would not like to diverge into numbers, but there has been macro inflationary pressures with respect to raw material pricing and minimum wage impact, right, which has affected the entire industry. So proportionately, we have taken price hikes across the range. We're also working on cost initiatives, cost-saving initiatives internally within the organization. But at the same time, we have taken price hikes to mitigate these pressures as far as possible. So rest assured, we're doing everything we can to still deliver healthy growth in margins.

So I'll ask the question the other way, [indiscernible] because the raw material limitation has been sustaining. So the recent price hikes that you have taken, the [indiscernible] that suffice you to cover the inflation or you might need to take more price increases?

No, we have taken enough increase in pricing to cover the inflationary impact. We don't see the RM impact going worst from here. I think we've seen the peak and with time in maybe a quarter or so, like it should start coming down as the war settles. But the pricing will not change, so that should benefit us in the later half of the year.

My other question is for Mr. Sanjay. Our other expenses for the quarter are in [indiscernible] for the year, ex of the ad spends have increased by 5% only. Now if this for a particular quarter, if you look at the online [indiscernible] online revenue has grown also in 19% odd. So the commission I'm assuming would also increase. So despite that, the other expenses have only increased by 5%. So what is leading to this 5% growth only? And how should we build in for the period?

Okay. It has a couple of elements. So you said roughly online commission. Online commission, again, is a dynamic negotiation between our platforms of the channel partners. And at times, there are waivers based on events, right? So that's 1 element. And also, if you see, as Nikhil mentioned, that our store count remained flat, which means that there was no new cost associated with EBO stores which came in this quarter. So that's also one of the reasons, right? So these two things kept the increase in other costs to the range of 5% to 6%.

Sir, just because the lease line item, if you look at the rentals, the lease line items showed a sharp increase in the lease related cost in the cash flows. So if you can give us a sense what kind of rent we have paid for the entire year FY '26 versus FY '25? Because the lease line item looks sharply increasing almost 3x.

It's a technical accounting thing. The Pantnagar facility which we acquired, technically, it is on a 71-year lease from the state government. So the cash outflow is shown as a payment of lease liability, whereas like in a normal course, you would treat it as a fixed asset acquisition, right? So that's why that number looks a bit inflated compared to previous year and compared to -- yes, compared to previous year.

Sir, what would be the normal rental if we have just have for FY '26 versus FY '25, that will be really helpful.

Gaurav, for a full year, if you eliminate INR 65.4 crores, that is the normal number.

Next question is from the line of Aryan Garodia from Ambit Capital.

Sir, for FY '26, if I see the inventory days, it has increased by approximately 5 to 6 days. So if I see that, which leads to increase in cash conversion cycle. So how one should think of going ahead with respect to inventory days? And what are the drivers for increasing inventory rates for FY '26?

Okay. I just want to highlight a bit here. Last year, we reached to FG inventory level in terms of payers or in terms of days of cover to a very, very minimal level, and we had to do that correction. We were deferring that correction. First, we are prioritizing liquidation of non-BIS inventory. And then eventually, where we have reached as of March '26, that is the right level of inventory to sustain the kind of growth or what we are aspiring for. So I would say that the level at which we are in terms of FG inventory, that's the right level. Going forward, it will continue to be that.

Got it. And sir, second question is like what drove the decision to undertake the recent brand refresh, like including the logo change and the broader branding initiative undertaken this year. Like what benefit do we expect this year to deliver in terms of consumer perception or say, brand positioning or consumer acquisition and in the long-term growth per se?

So this has something been on our cards for a long time actually. It's not like a very recent decision. Of course, we've executed it right now. So broadly, the idea behind that is that the logo we wanted to come up with a refreshed logo to also project the initiatives and the changes that have taken in the brand. We have really transitioned and transformed the entire brand positioning in the last 2 years or so. And therefore, the brand refresh or the logo refresh was important to be able to justify that to the end consumer. And this is something that we do a very detailed consumer study every year in January across cities with thousands of consumers. And this is also something that was very well received as a question that when we put up to them. So they did really appreciate the brand refresh, the new identity. So it's been very well accepted in the market, very positive feedback from all the trade partners, including distribution channel and online partners. Because the word mark has obviously been very, very strong as [indiscernible] but we do believe that the brand in today's time, we needed a new identity in terms of logo as well.

Got it, sir. Just one last question. , which could be the areas where the cost can be saved going ahead? Like would ad spend be a part of this exercise since it would land up impacting the market share growth?

No. Great question. So ad spend is something that specifically, I would rephrase that as marketing in the brand building initiatives. We don't want to compromise on that at all. And in fact, we've taken a fairly aggressive budget in FY '27 on the marketing side, of course, keeping the overall margin in mind. And we are -- that is something that we have never compromised over the last 20, 25 years. It is the philosophy of our brand identity that we've continued to invest in marketing, no matter how the markets have behaved and that is why we've continuously grown the market share. So we'll continue doing that this year as well. We don't want to deliver margins just by cutting corners with respect to marketing.

Next question is from the line of Umang Mehta from Kotak.

Congrats on a strong year. My first question is on the sneakers portfolio, possible to share how much did they grow? What was the mix in terms of volumes, revenues in F '26? And how are you looking to scale that up going forward?

We've had a very exciting, I think, year with respect to sneakers portfolio, we've grown this portfolio about 100% year-on-year. But this year, we have delivered also like 100% plus growth on an annual basis. And quarterly, it's been like 50% plus growth with respect to a sneaker portfolio. So it is a testament to the fact that the development with respect to the products that we have done in sneakers and the quality we are able to produce it at from our new plant at Pantnagar and Haridwar has been phenomenal and very well received in the market. So we'll continue doing that. It is something that is a big priority for us as a brand and a company, and it's definitely adding to the premiumization mix as well.

Understood. So can we assume that you are constrained by capacity as of now and this INR 2 lakh per month, which you are adding, this INR 2,400,000 annually will entirely kind of potentially grow your portfolio by another 60%, 70% in F '27 assuming that demand is robust?

Sure. So I would not say that capacity is a constraint at this point. I mean, we have enough capacities, and we will -- and this is -- this number of INR 200,000 is actually a very dynamic number. We are continuing to increase capacity. The plants have been set up in a way that the capacity for Pantnagar, for example, after 2 phases of development can go up to 6 lakh pairs of sneakers per month. And HRD2 can go up to 2 lakh pairs, right, which it already is currently operating at. So we are targeting in totality of 8 to 9 lakh pairs monthly production of sneakers, and we're well on track to do that. So it's a phase development. I would not say we are short at with respect to capacity at the moment.

Understood. And the second question was around pricing and margins. So historically, have you taken such large hike you would have taken? I'm assuming a high single-digit hike could have happened. Does it lead to any temporary demand shock in terms of volumes? And in that context, do you think '27, you could kind of come to your aspirational margin band of 17% to 19% or would be push that milestone by [ 2.28 ] given the tough macro backdrop?

So I do not think we have seen such an inflationary pressure in any of the past years. I mean, as much as my memory can take me with the kind of pressures that have come from a raw material standpoint as well as from a minimum wage standpoint, there is it's a very major increase that we have seen. We have tried our best to pass on this increase through an MRP increase through the entire portfolio. We are trying to balance between the increase in ASP versus ensuring that demand also sustains. So we are in a very nascent stage right now. This price increase happened in the first week of April. Right? So we are just in the process. Of course, there would always be resistance when you take a reasonably strong pricing across your portfolio. but we are trying to mitigate it through better supply with better product launches as well as using our share of new product development that we do into the market. So we are trying to balance the 2, while we need to protect our margin, but at the same time, we do not want to lose our market share. So we are trying to find the right a little. The inflation pressure is very high. Of course, that is the bottom line. And we see us trying to maintain our market share without compromising on margins.

Understood. Any guidance on...

And in April we were able to have a reasonable cost as well. So April was also on a positive note.

Understood. Any margin guidance you can share for F '27?

No guidance, unfortunately. But we will definitely endeavor to stay within the range we've guided before, 17% to 19%.

Next question is from the line of Avinash from Motilal Oswal.

So my question is regarding the [indiscernible] So last year and the year before, we have seen a good number of consolation in the store product -- store could have more or less been flat. So how do we see this number going forward?

Sure. So last year, we did a correction. This was the year where we actually focused a lot on profitability. So we shut down about 10 -- 9 to 10 odd stores, and we've opened about 13 to 14 new stores, right? So -- and that has, of course, improved the P&L for this specific channel. Going forward, this year, we will be back with respect to opening of new stores, and we expect to open anywhere between 60 to 70 stores or about 80 stores, I would say.

Got it. And the book keeping question would be the CapEx for these stores and also the facilities that we'll be incurring next year?

CapEx for the stores, right? So we only do CapEx for our CoCo stores, wherein you can assume the mix to be, 40%, 60%, approximately like 40 cocoa and 60 [indiscernible] So there would be some CapEx with respect to our 30, 35-odd stores that will be open.

But no, I mainly asking from the company level CapEx, how should we see? [indiscernible] our Pantnagar partner facility has incurred a major CapEx last year. So how should we see this number next year?

Last year, it was -- since it was an acquisition Pantnagar facility, so the CapEx was relatively high, but apart from that, the CapEx would continue to be in the normal range, which is plant routine maintenance CapEx plus regular CapEx [indiscernible] regular CapEx on EBO store additions and IT infra, et cetera. So we'll go back to the normal range. And then over a period of next 3 years, we'll be incurring CapEx for expanding our Pantnagar facility, including addition of assembly lines. But first, at this point in time, we'll try to optimize on the utilization of the upper facility at the first place in Pantnagar. So we don't see FY '26 like CapEx spends in FY '27.

Next question is from the line of Devanshu Bansal from Emkay Services.

Yes. Congratulations. Sir, we've recently concluded our annual distribution need. I believe this is an important annual event for you. Checking if you can share some insights from the [indiscernible] business, whatever you maintained during the ring?

Yes. So no, we had a very successful meet, included that last week. It was 2-day fair. And of course, all our top distributor partners and our franchisee partners and online partners were all present. So we've received like really, really encouraging set of quarters. I will not be able to share the numbers around that, unfortunately, but this is something that is like a 4-month forward number, which helps us predict our supply and demand. And of course, this meet was also focused around not just the orders but also the new brand logo reveal and a couple of other surprises, which I will not be able to share at this point, due to confidentiality reasons. So in all, like this meet has given us very good visibility with respect to the orders and with respect to demand for casting that we need to do to plan a supply chain.

Fair enough, Nikhil, I understand the competitive nature of the [indiscernible] maybe in comparison to last year, whatever demand trends or [indiscernible] these all are qualitative things as well. So if you can just compare over the last few years, how was the environment and maybe compare that with the current year, that would also be helpful. Maybe if you could share some [indiscernible]

On the order front, what I can say is that we had wanted to take our entire order book until the month of September, depending on the EOP alignments with our distributor partner, we were able to close that over 100%. So the total alignment, which was deployed to the partner network till September after excluding April revenue, which is already recognized by the thing, the balance number is what was committed and I was aligned with the partners to come and taste [indiscernible] they deliver 100% of that number. So whatever is our EOP line distributors has been concluded in September. Now the execution phase starts. The orders are in, right now.

Fair enough. This is really encouraging. Secondly, we are -- as a footwear industry, sir, we are entering an inflationary environment. I'm checking, if you could share some insights around possible impact on the demand front as well as key raw materials. I also sort of understand that this is a period where you can also sort of gain a good amount of share from the unorganized channel. So if you could share some sort of insights around that?

Well, we have seen inflation in -- across categories, actually in raw material because most of it is linked to crude in some way or the other. But major impact we have seen is in EBA and BU pricing, right? So -- but already, like I mentioned before, we have seen the peak of it. And as we speak, the prices have started to come down a little, and our latest purchase was at a slightly lower price, which is encouraging signs because the market is reacting to it. So it's a very dynamic environment at the moment, and we have factored in the peak raw material pricing within our cost and within our pricing that we have passed on. So that way, we should be covered. With respect to demand, it is something that we'll yet to see. I mean, as Uplaksh mentioned, we've seen a strong start to the quarter, quarter 1. And of course, like it would be difficult to predict as we go on. But we are fairly confident of maintaining market share and growing market share actually at this time because this -- the impact that we have passed on as brand, I don't think it's very comfortable and easy for a lot of the other smaller players to pass on in the market. Therefore, we believe that we should gain as a brand in terms of market share.

Initial signs of consolidation, Nikhil, this last bit -- if you could address?

There are signs of it. I mean, signs with respect to -- because you'll have to understand that not every brand will have the pricing power to pass it on and also, at the same time, absorb all the entire raw material costs. So there have been signs of industrial respect going down [indiscernible] that have come -- has come to our knowledge. So there are many companies that have slowed their production at this time.

Next question is from the line of from Sameer Gupta from IIFL Research.

So firstly, sir, on the ASP growth of 1.5% this quarter, now there is a healthy growth in the D2C online and offline space. And typically here, realizations are higher given no or lower low trade margins. So unless the overall mix has been kind of unfavorable, what explains the low ASP growth this quarter?

It's primarily the GT charges impact. So last year, in the online business, let's say, we were having a ASP of 100. But in this year or since 16th of June, the portals changed their accounting wherein they are -- rather we are not billing. We have -- instead billing at INR 100, we are building them at INR 82, INR 18 towards freight is being built directly by them. And hence, to that extent, my revenue has come down and resulting into a lower ASP. So this change happened with effect from 16th of June, which was not reflected in last year Q4, but is fully reflected in [indiscernible] Q4.

Got it, sir. This explains. Second, sir, and this is more of an industry question. Been there is no chatter around BIS [indiscernible] Any indication you are hearing that there could be any relaxations on the BIS front? Or is this a charter with no substance?

I think it's just a charter at the point. And as a company, we are fully covered with respect to the compliance. So as we speak, we are left with hardly any stock of BIS. So we'll be fully compliant by 31st July.

Next question is from the line of Shraddha Kapadia from SMIFS.

Congratulations on this set of number. So if we take a thing there is increase in consultation on the global as well as the local brand, especially in the affordable leisure segment. So what does the management believe Campus' strongest mode as of today, would it be distribution size [indiscernible]

I'm sorry. Your voice is not very clear, Shraddha. Can you...

Yes. I'm already on handset.

You're not very clear. I'm sorry, can you please repeat your question, Shraddha?

Can you repeat your question, Shraddha? [Operator Instructions] We'll take our next question from the line of [indiscernible]

Sir, my first question is related to the PAT margin. During the quarter 4, the company has reported the 9.6% PAT margin in comparison to quarter 4 '25, 8.5% and for the full year, it is 8.4%, particularly because in quarter 4, we have reported the ASP of 668, which is lower than the full year ASP of 683. So what has actually occurred? And what is the figure point by which our PAT margin has increased during the quarter 4. Can you please throw some light on the PAT margin, sir?

The PAT margin growth is primarily driven by revenue and volume growth. If you are trying to link it purely with ASP, the ASP is a function of channel mix as well. So quarter 3 ASP or full year ASP is higher because of quarter 3. Quarter 3 ASP is higher because of higher saliency in online and quarter 3 being season, right? Quarter 4 -- when we enter quarter 4, the mix changes, which also includes more of school shoes and hence, the ASP is slightly subdued. However, having said that, ASP, lower ASP does not mean that lower material margin, right? And in quarter 4, we have shown decent growth in both volume and revenue, which has resulted into a better PAT margin.

So is it particularly the quarter 4 episode? Or can it happen in the another quarter also? Because you mentioned that the school schools were sold during the I think the more contribution from the school shoes segment. Is it like that or the quarter 4 is a onetime in during the full year?

School shoes is highest in quarter 4. And then again, there is school shoes in somewhere around September, October, which can be -- which can fall either in quarter 2 or quarter 3, right, which will result in slightly lower ASPs. That's it. But that does not mean it will result in a lower margin.

Okay. Okay, sir. And sir, I go through the presentation. Our still the outsourced versus the in-house ratio is still in favor of the outsourcing. Sir, is our well thought policy? Or will it be changed gradually by [indiscernible] capacity? Or can -- by increasing that capacity, can we improve the quality and overall margin for the company?

Okay. It will definitely improve over a period of time, but it will show a very gradual change in the mix of in-house because the upper is still we have a very good number of outsourced partners who make upper for us. Exclusively. So that will continue to be there. What will happen or what will change with the investment in newer capacities that the sneaker volume, which has a high demand and requires investment in machinery, which we have done and not our outsourced partners. So the sneaker volume will continue to be in-house, right? So that will help us to improve the mix to serve our consumers in the category where the demand is and will result in a higher ASP as well. So basically, you can foresee this as that the future growth will be met from our in-house facilities, by and large, and that will result in a gradual shift in this saliency of in-house sources, outsourced mix.

Any outsourced party is related party or all are the third-party?

All are fragmented, very small. We have approximately 100-odd job workers, which work exclusively for us. Okay.

And sir, my last question related to D2C channel. So you mentioned in the presentation that during the quarter D2C channels has contributed around 48.3%, say a 44.8% on a Y-o-Y basis. So which vendors are holding under the D2C category and how this margin profile?

So by D2C, we mean both D2C online, which is the portals, primarily Flipkart, Myntra, Amazon, Snapdeal, et cetera. And D2C offline, by D2C off-line, we mean the D2C is direct-to-consumer. D2C offline means all our EBOs franchisee partners and large format stores like DMart, VMart, Lifestyle, Reliance footprint. So all this where we reach directly to consumer instead of reaching through intermediaries. So that is D2C.

And how it effects the margin, margin profile?

We work on a certain margin threshold that remains the principle of criteria for reselling the product, barring the EBO channel or exclusive stores where it is more about reaching out to consumers are reaching out in the new markets and the gestation period for such stores is slightly higher versus any other D2C online channel.

We take the next question from the line of Gaurav Jogani from JM Financial.

My question is with regards to, again, the competitive intensity given the fact that you are now able to produce S r-Norge fromeakers and also many of your competitors are facing issues in terms of production or getting footwear outside -- from outside India with a reasons and many other reasons. So how that has helped you over the last 1 year in terms of market share gains, if you can highlight some of the scenarios where it has played out?

When we think, Gaurav that, while we haven't done, honestly, a detailed study on market share post the IPO, but we do track the industry growth rate and we don't think the industry has grown last year beyond 7% to 8% at most. And as growing at about 12%, we think we've definitely gained market share. So there is some a bit of consolidation that has happened in the market, both with respect to sports and sneaker range. So definitely, given the current situation, we have a good opportunity on hand to further increase our market share in the market.

And, Nikhil, the last bit from my end is in terms of the logo now, given that we have a completely new logo, has there been any issues that you would have faced because people would associate brand Campus with the older logo? And how do you communicate the newer logo to this? And because of this, have you see any disruptions in the interim?

So it's a very valid question, Gaurav. So we actually did a soft launch of this logo in October and November last year, where the new products that were being launched in the market were all with the new logo, starting October 2025. So that was a soft launch. We didn't announce it at that point. And we have seen like -- and the numbers basically tell the story, right? Like O&D, we've had great results and even quarter 4. So that is clearly reflecting that all our NPDs that have been launched with the new logos have been very well received in the market. Therefore, that gives us confidence that the logo is very well accepted.

[Operator Instructions] Next question is from the line of Mansi Doshi from Smith.

Congratulations for such a strong performance. There are 2 questions from my side. So Campus has been strong is in North India, while South and West regions still contribute relatively lower sales. So what are the key consumer differences, consumer behavior differences in this market? And are you making any changes for being made to product assortment or planning to improve the penetration across this region? And the second one is, given the competition from global as well as local brands also the competition is increasing in affordable segment. What are the Campus' strong notes today, is it distribution rate or pricing or any local trend responsiveness? So what makes it different from the other global and local plants?

So, Uplaksh this side. On the first question, right, you asked about us being a north-heavy business. Actually, that's slightly an older philosophy, I think we have been able to extract and reach a lot markets. Just to give context, currently, our second largest state is Maharashtra right, which wasn't so 5 years back from a [indiscernible] point of view, right? So there is a significant increase in a lot of states, including Maharashtra, Gujarat, MP, West Bengal a lot of other things, right? Including South. So we have done a reasonably strong job in AP, Telangana, and we are focusing on other states as we speak. There is a product differentiation from a market requirement. Some markets are slightly more open heavy. Some markets are slightly most shoes heavy, some markets sneaker heavy. We try to customize our offering, looking at the requirements of the particular channel as well as the geography. So the requirements of an online business will be slightly different. The consumer profile will be a bit different, and the general trade consumer will be slightly different. The consumer cohort is different, the geography cohort -- so we -- since we have a very big assortment, we are able to customize our offering depending on the requirements of this particular market. So our team in the regular visits to find out what exactly is the need, we do competition benchmarking. We do online benchmarking to understand what's happening in the market, and we build that into our product development cycle, right? So that -- so we are not really not heavy company. Amongst the top 5 cities, there is Pune and Bangalore in our online businesses. Right? And #2, general state is Maharashtra today. So we have pretty much a very strong Pan-India story and not really a regional story. And that's one of the reasons for our scale as well. On the second, please, when you mentioned what -- there is competition from multiple sized local players incoming, right? So the mode of campus is a multifold mode, right? We have a completely vertical and horizontally integrated supply chain vertical. We have the strongest distribution network. We have a very strong back-end R&D engineering, and we have a legacy and a brand identity and customer loyalty of over 20 years. All these add up to where our brand model, and I do not see it's very easy for anyone to want to replicate it. Of course, there would be competition, and that is part of our business. But all these modes are very difficult, if not impossible, to replicate in today's environment. So we believe that we have a right to win in the market, and we'll continue doing so.

To contextualize a little bit in numbers. We did have just a very small check at our end with respect to anybody trying to replicate our supply chain would need maybe close to around INR 2,000 crores today to replicate the same level of supply chain that we have with respect to land, building, the plant and machinery that we've set up over the years. So it is something that -- and it's not just the investment part of it, it is much more than that to be able to grow together with the entire vendor base to take them along with you, your partners, your channel partners. It's a very fairly complex ecosystem that has been created with a lot of rigor and brand, of course, investment as well over the years, which is something that we don't think it's very easy to replicate by anybody else very easily.

We'll take a next question from the line of Tejas Shah from Avendus Spark Institution.

Three questions. Sir, first, this quarter was a complicated quarter from the sense to gate consumption demand sentiment because a lot of development happened in the fag end of the quarter. So just from your assessment or the way you are looking at data, would you say there was a perception or there is rather a perceptual shift in demand momentum, which should sustain in FY '27 or you believe that the whole event that has played out or unfolded in last 60-odd days kind of disrupt the momentum which was created?

So no, you're right. There has been -- it's been a very dynamic market at this point, but more so from a supply point of view, I would say. And like I mentioned, we've seen the peak of it with respect to availability of raw material and the pricing around it. Now going forward, we see stability and some raw material has started to correct already. But on the demand side as well yes, there has -- until March, we were -- we've not seen really much of an impact. There was some impact in the month of March. But not significant. Going forward, of course, if the war sustains, then it's anybody's guess, to be very honest, we will not -- nobody will be able to commit any kind of numbers with this kind of scenario, prolonging for a very long time, right? But if it sort of settles at this point, we see a good recovery in place and the market should recover also fairly soon.

Okay. Sir, second, on our better performance in online versus the other channels. Was there any concentrated effort which actually played out or kind of resulted in good performance or facing this year in the channel. That's one. Second, based on the data because online is very reflective channel on that front, do you believe that we would have gained market share or the channel itself did very well for the [indiscernible] at large?

I think the growth of marketplace is a growth that has been happening for some time for us, right? This is a journey we have been over the last 3 years. We have been building our our own capabilities of running and marketplace operations over the last 12 to 18 months. We've also started leveraging the infrastructure of Flipkart, Amazon and Myntra as well through the [indiscernible] which we supply through their warehouse infrastructure, right, to be closer to the consumer cost. Last quarter, of course, the big call-outs for the quarter would, of course, be our long-term partnership with Amazon and the growth potential that we are seeing there has been a story that has been playing out for over 18 months now. And we see it continuing into the long-term future as well. Our brand.com is a very successful story, only launched about 3 years back. It is -- it will be among the top 4 marketplace platform, if I compare it as an individual marketplace as well as well as Snapdeal, which has also been a very, very strong turnaround story for us. While Myntra and Flipkart continues to be very big players for us, we've also been able to scale up the other partners and bring them to a certain pedestal. So we don't see marketplace growth to be slowing down anytime soon. Of course, it's a tough space because it's extremely competitive, extremely expensive, extremely complicated looking at the way this business is run overall looking at the complication of return, logistics, marketing, other factors as well as the alignments with the larger team. We have been signing up GBPs and GMPs with all these big players. So that we have a long-term alignment and visibility with them. and we are able to focus on long-time growth creation with these partners. So marketplace operation is extremely positive. Only Flipkart is the only partner we work with from an outright business point of view, all of the businesses for us on the online side are pure marketplaces.

And sir, last 1 on brand logo change. Usually, such an established bandwidth when it goes for a renewal on the logo side. At least for the initial period, it needs a lot of branding and marketing support for to create that recall. So should we expect some heightened branding spend this year? Or will it be part of the [indiscernible] in terms of what we'll spend on this?

No. So it will be part of the regular spend only, but more focused on the brand building side rather than performance marketing. So that is something that we endeavor to do this year is focus more on the brand bidding side.

Thank you. Ladies and gentlemen, that was the last question for today's con call. On behalf of Campus Activewear Limited, that concludes this conference. Thank you for joining us. And in case of any further queries, please reach out to Campus Activewear Limited Investor Relations team at [email protected]. You may now disconnect your lines.