Operator
Ladies and gentlemen, good evening and welcome to the Campus ActiveWear Limited's Q2 and HY FY27 earnings conference call. Before we proceed on this call, Campus ActiveWear would like to point out that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It must be viewed in condition with our business that could cause future results, performance, or achievement to differ significantly from what is expressed or implied by such far-looking statements. As a reminder, all participant lines will be in the lesson on remote, and there will be an opportunity for you to ask questions after the management's commentary. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your phone. to discuss the results. And please do welcome Mr. Nikhil Agarwal, Chief Executive Officer, Mr. Uplaksh Tiwari, Chief Operating Officer, and Mr. Rakesh Thakur, Chief Financial Officer of Campus Activaire Limited. Thank you and over to you, sir, for your opening remarks.
Thank you. Good afternoon, everyone, and thank you for joining us for Campus Activares Quarter 2 FY27 Earnings Call. I am pleased to share that Kampers has delivered another strong quarter, with a revenue growing 16.9% YOY to 452 crores, driven by volume growth of 10.2% to 6.3 million pairs, alongside a 6% improvement in ASP. This performance is particularly encouraging in a relatively subdued consumption environment. More importantly, our growth is increasingly being driven by stronger fundamentals. A broader consumer base, a richer product portfolio, and deeper market penetration. Our continued investments in product innovation, design, and distribution are translating into tangible results. First, we are successfully expanding our consumer base. Our women and kids categories grew by 27% and 34% respectively during first half FY27, significantly outperforming the overall business. These categories represent substantial opportunities to expand our addressable market, and we believe we are still in the early stages of unlocking their potential. Second, premiumization is emerging as a powerful structural growth driver. Our products priced at 2,000 and above have delivered volume growth exceeding 50% YOY, with their contribution to the overall volumes increasing from approximately 9% to 13%. This reflects growing consumer preference for differentiated design, comfort, and quality. Third, we are strengthening our opening channel presence. Alongside our traditional distribution network, we are witnessing encouraging traction across emerging digital platforms including QuickCommerce and our own brand website. Their combined contribution to D2C online revenue has doubled YOY during the quarter. Our strategy is clear. Make campus available wherever our consumers choose to shop, while maintaining a sharp sharp focus on channel productivity and profitability. Coming to profitability, our material margins remained under pressure due to significant inflation and key input costs. While we have taken calibrated pricing actions, there is an inherent lag between higher input costs flowing through our inventory and the corresponding pricing benefits being fully realized. It is important to distinguish between recovering absolute input costs and protecting a percentage margin. We believe maintaining the right balance between growth, consumer value, and profitability is more important than pursuing aggressive price increases for short-term margin protection. Despite these pressures, we delivered EBITDA growth of 12.5% and PAT growth of over 21% YOY, reflecting the resilience of our business. Looking ahead, we expect a meaningful recovery in profitability during the second half of the year, supported by the progressive benefits of pricing actions, improving product mix, operating leverage, and continued cost discipline. We remain confident on delivering a full year XR27 EBITDA, margin of 17%. Stepping back, I believe campus is entering an important phase in this growth journey. FY27 is about sustaining growth and demonstrating operating resilience despite significant and good cost inflation. FY28 will be about converting this stronger growth platform into accelerated earnings and improving profitability. We remain committed to building a larger, more diversified and increasingly profitable campus while creating sustainable long-term value for our stakeholders. With that, I would like to thank everyone for joining us, and I hand over the call to our CFO, Mr. Rakesh Thakur. He will take you through the financial performance in greater detail.
Thank you, Nikhil. Good afternoon, everyone, and thank you for joining us for the Q2F527 earnings call. I am extremely pleased to report that we deliver double-digit volume growth in back-to-back quarter one and quarter two consistently. Which is taking the H1 growth at 11% combined. For the quarter, the volumes grew up by 10.2%. Revenue from operations grew by 17%, closer to 17%. Which has taken our revenue to 452 crore. With steady growth across all the channels. At trade distribution, register growth of 14%, while at D2C, online channel grew by 22%. D2C offline grew by 13%, wherein retail, in fact, did pretty well. We sold, like Nikhil mentioned, 6.3 million pairs during the quarter, and ASP has grown by 6% year-on-year, and women's and kids' shares in the revenue mix have inched up from 21.7% last year to around 22.7% during this year. A gross margin, like Nikhil mentioned, are at 54% in the current quarter versus 53.9% in the last quarter, and we did witness inflationary pressure on the material side. The bidder grew by 12.5% year-on-year to 62 crore, and the margin stood at 13.5% during the quarter, which is a marginal decline by 50 basis points versus the last year. But we recorded a strong 21.3% growth in PADs, outpacing revenue growth, and PADs stood at 24 crore, which is 5.3% during the quarter, and improvement of 20 dips versus the same quarter last year. That's on the P&L side. Our balance sheet remains strong, with ROSI improving at almost 22.3%. And ROE at 18.5% as of September 26th. Networking capital days have inched up during the quarter because of the planned break-up of inventory for the season in Q3. I think with this, I will conclude my remarks and open the floor to the moderator for Q&A session. Thank you.
Operator
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and 1 on a telephone keypad and wait for your turn to ask a question. If you would like to withdraw your request, you may do so by pressing star and 1 again. Participants are requested to use handsets while asking a question. First question comes from Mahesh Dolani from Go Quarter. Please go ahead. Mr. Mahesh, please go ahead to requesting some. There is no response. The next question comes from Devanshu Bansal from MK Global. Please go ahead.
Hi, Nikhil and team. Thanks for the opportunity. Congratulations on good bad growth in the quartet. Sir, you have shared some interesting insights this time around. So, I just wanted to check on this kits and performance wear opportunity. The current scale of the industry per se and what kind of market share are we targeting in these segments. So whatever initial thoughts you have, if you could share some sort of insights on that will be helpful.
Hi Devanshu, can you please clarify again which segment are you talking about?
These are absolutely nascent segments. We've just started revamping these segments, and very aggressively so, both women and kids, and we have, these are pretty much like white ocean, like blue ocean markets for us, it's completely white space, big white space, and we believe that there are very few organized players targeting these two segments. So, Campbell definitely has a big right to win, given our expertise in both of these segments, especially the sport shoes and the sneaker market, along with performance, you know, where they're entering now, also aggressively. Performance is the next road driver. We've already launched badminton, and now in the process of launching cricket and running shoes very, very soon. This can be a great opportunity for campers going ahead as a growth vertical. You know, our growth vectors have been performing very well and they have been delivering the majority of the growth, actually, of performing the core business.
We have launched three new business opportunities this year. Apart from performance, there is Apparel, which was launched in retail at stage 1, Milan was the second launch, and now we have entered into performance as a third launch. We have launched this category about 60 days before through an online platform, and the initial results are extremely positive. You can see and order the products on TripCart and Amazon as well. And we believe this will be one of those drivers of disproportionate growth for us because of the white space and nickel invention. Kids also, we have seen, like you have seen over the last two to two and a half years, you have seen disproportionate growth coming from women in our business. You will see a similar pattern coming through kids as well. You have seen the initial nascent stage with disproportionate growth coming from the school shoe category for the last two quarters. The same will flow into other category of sports shoes as well as smallest kids. Or kids of a lower age segment as well. The same story that we have delivered with women as a business, we will be delivering with kids in the going ahead session, as well as performance is going to be a very big bet, starting with badminton, moving on to running, football, and cricket as well.
Got it, sir. That's very encouraging. Secondly, I wanted to check some of your peers who play in the value segment have shared very aggressive outlooks in terms of growth. So, I wanted to check, is this a sector-wide uptick in growth momentum that you are noticing and whether you would also like to sort of provide some medium-term growth outlook for campus as a whole? So, that would be helpful.
So, our direction remains consistent. We believe to be delivering mid-teen growth and what we have delivered, and we continue to deliver on the similar pattern going on. We don't see any changes in that future-looking forecast. For this year? For this year, yeah.
So, just a small follow-up here, because peers like Asian, etc., are indicating like 25% kind of growth outlook, right? Wanted to check as in is this kind of a conservative kind of stance that you are sort of adopting or whether we can see positive surprises on the growth trend because the opportunity seems to be very large.
We will not leave any opportunity on the table. We are focusing on all segments that we need to address while being financially prudent as well. So our growth has always had a backing of financial prudence behind it. We will take decisions looking at profitability of the category, and we will not run any business for driving revenue without it adding to our bottom line. Right, so we are very clear on that principle, and wherever we see opportunity, we will go aggressive. We are confident of delivering mid-team growth. In-team, of course, we have a bigger plan for the long term as well, but at the current juncture, for this financial, we will want to stick to a mid-team guidance as well.
Good morning, sir. Thanks for taking my questions, and thank you.
Operator
Thank you, sir. The next question comes from Vidisha Seth from Ambit Capital. Please go ahead.
Hi, I hope I'm audible. My first question was pertaining to the channel-wise growth. So when I see the growth in the trade distribution channel versus the EBO channel, trade distribution accelerated to around 14-15 odd percent, but EBO was probably moderated to 11 due to the festive shift impact. So, fair to say that the distribution channel would have been sufficient inventory for the festive season, and how to specifically think of growth for this channel going forward at primary and secondary levels?
So, the EBO number has a bit of an underlying reason to it, like we have given your commentary earlier as well. We were in process of a model transition for a franchise. Which is now 100% completed. Almost 50 odd stores got converted in quarter 2 as well, which of course has an accounting where you take the inventory back and then rebuild it. So it has an impact of inventory converting the system and going out again. And hence the franchise number will start showing double digit, sorry, significantly higher growth. Just to give a perspective, in the same quarter, our cocoa business grew at a likely rate above 20%. As well as the partners who transitioned in quarter four of last year have shown the range growth rate of 20 to 40% for H1 of this year. So we are very confident that this retail number, which shows a slightly lower number of 13% of retail, that has other channels as well, there is LFS within that as well, but we are very, very confident of showing double 20% plus growth on the retail front, because that is already what we are seeing, just the model transition is taking away some of that positive repercussions coming there, but you will see that number simply improving in the upcoming quarter. So, and on the trade bill, of course, the seasonality has shifted a bit later. We have seen that happening, same with online, same with offline, but it's not, the growth is not driven by this aggressive inventory, which is in line with our standard inventory
So, you would expect the 15% growth in the trade distribution channel to largely sustain even going forward?
In that range, in that range.
Second is, if we were to break down the ASP growth of 600% into premiumization and even price hikes that would have probably been undertaken, can you call the bifurcation out and even going forward, to what extent do you expect to see this ASP growth, Shekhar?
So, our ASPs, you know, like we've taken approximately 40 rupees of ASP junk. In terms of absolute value, 12 to 13 is attributable to the premiumized 2,000 plus rupee segment, and the balance is the product mix and the MRK increases that we have taken. Right? So, that's the broad split of that. This is basically, this was enough to offset any increase in raw material inflation that we have witnessed. So, that we had accounted for, and that is the kind of increase that we took in the MRPs.
Noted. And the third question was on the T2C or the online channel. How different is the portfolio and price points being sold across your own website versus the likes of Amazon, Flipkart, and QC?
So, I'll take the brand.com question first. Brand.com will share almost an 80% portfolio with what the rest of the marketplace operations will be selling. Plus, they will also have access to the retail exclusive lines, which will only sell between retail and brand.com and will not be offered to the rest of the marketplace ecosystem. BigCommerce is a much more limited set. We were only selling, for example, open footwear on Vinkit for the longest time, only about two and a half, three months. We just introduced about three shoes. Zepto is a portfolio of about eight to nine products across four open footwear and four closed footwear. It's a much more limited tight portfolio available to these products and not the entire gambit that we have to offer between these channels.
So the growth that you've seen in your brand.com operations, that would primarily be led by which price points or any particular part of the portfolio, if you'd like to call it out?
It will be on a similar line, but the ASP behaviour is significantly better than a marketplace operation because we also work on selling more premium and showcasing products like Elan as well as our retail efficiency ranges there. So the ASP profile would at least be 8-10% higher than our marketplace business today. The product that we sell, of course, since 80% of our profile matches with what we sell on our partner's commerce as well, the product profile will not be very different, but the new age category that we do, be it apparel, elan, or performance products, or premium inclusive, will have a higher share on our brand.com as compared to marketplace operations.
Got it. And lastly, if I may, can you call out the festive trends that you're observing at consumer level so far and how does it compare with the festive last year? If any particular categories or channels are leading, what kind of trends are you observing?
I mean, last year there were multiple inputs that went into market around this time. Of course, there was a very big GST change that happened in the market followed by a big festive push. There is no GST, of course, this year. So that one big blip that came into the system at that time doesn't exist this year. But like-to-like, if we compare, we change, when we compare our D2C ecosystem, where we are able to compare, we are seeing double-jit growth there as well right now.
Got it. Thank you. That's all for my time. Thank you, ma'am.
Operator
Participants are kindly requested to ask two questions in the initial round and may join the queue for more questions. The next question comes from Umang Mehta from Korthuk Securities. Please go ahead.
Hi, thanks for the opportunity. My first question was on the new categories, you know, Elan, performance footwear, and even sneakers, if you can add to that. How much would they have contributed in first half in terms of top line or volumes? Any color would be very helpful to understand how that is.
We are doing a good job. We would have sold over 20,000 units of apparel already in the last five, six months, finally through our retail ecosystem. We would sell over 100,000 units of alarm as well in the financial year. So reasonably successful. And we are not going very aggressive on inventory. We are doing very clean cut launches, being very clean on channel exclusivity, on where we want to launch these products. We are seeing very good super. So there is no inventory issues of these categories. The partners are happy. There is a very strong brand communication. We would have seen the gym staff campaign that we did along with Amazon Prime during launch of that category. We are planning something similar for kids. So everything is linked to a much larger GTM and not just an ancillary category, which I'm trying to pump a new product into the market. Right. So we are very happy with the results. Badminton is a very nascent launch. I mean, The numbers might be small, so in the last 30, they would have sold maybe 300 units, only on our online platform, but we are very happy because we launched only about six products there, right? So we are seeing very, very good traction, and that gives us the conviction of doubling down on these categories. So there's already an Elan 2.0 coming next month in retail. If you visit our stores next month, you'll see a much more unique profile of Elan coming into our ecosystem. Same with performance. So there's already a cricket line coming in January, right? So, I mean, all that. We believe all these small categories have the right to win in itself and will become. And that's what we are investing behind today. So we are not very worried, is it 5% of my revenue or 3%, but eventually it will be a substantial part of my revenue in the next couple of years. That's what we are going behind. And then on all three categories that I mentioned, performance, learn, and after all three are past categories, we are doubling down and expanding the range and not slowing down. So that should give you confidence that, you know, we are very happy and the inter-eco system is driven towards, you know, making these categories really larger.
I understood. The second question was to Nikhil. Nikhil, we've kind of heard some chatters around, you know, promoters wanting to sell, and, you know, it's been impacting the stock sentiment to some extent. Possible to clarify, you know, how are you thinking about it, and is there any such plans in the immediate?
Got it. Sure. Thank you. I'll come back in the queue.
Operator
Thank you, Sam. Dear participants, if you have any questions, please press star and one on your telephone keypad. The next question comes from Bhavish Jain from DV Investment Advisor. Please go ahead.
Thank you for the opportunity. It is more of a bookkeeping question from my side. So, in our balance sheet within other current assets, there was government authorities of 125 crore in FY26, which has jumped from 72 crore in 2025. So can you just elaborate on what is this related to and how are you planning to realize this amount and in what time?
Thanks for the question. Broadly, if you look at 125 crore, it's largely GST input credit lying in our balance sheet. If I split it into two, three parts, see, we are claiming refund from two states, which is HP and UK. I think that itself is in this month, next month, we'll be claiming roughly 25 crore rupees. This leaves the balance to 100 crore. Within that 100 crore, the 40 crore is Haryana, rest is different states. But if you would have noticed in last amendment in GST meeting, the council meeting has happened. I think now the services, on services also, you can claim the refund, right? That's really going to help us release, unbox some of the GST input credit. We can claim the refund in both HPA. The second piece is the accumulation which was happening every month on a 2-3 crores, that's also not going to happen. And last bit is you would have seen that our inventory is slightly at an elevated level. As it gets unlogged in the next couple of quarters, this number will further come.
Okay, so any expected timeline when we can realize this amount?
Yeah, it will take, you know, good 12-18 months to, you know, unlock this number. Yeah, and broadly, inventory coming down, this number will, you know, come down significantly by March, post that this number will be, will take some time to get unlocked.
Okay, and do we see this figure recurring again in future?
I want to just clarify that this accumulated because of the services that we were awaiting and there was no law before earlier to use that input credit. So now that we are able to utilize that, there is absolutely no more further accumulation. This number will only come down. So one big chunk will come down post-March after the the season and the inventory comes down, and then it will steadily come down over the next six months after that. That is the plan for action from our side.
Operator
Thank you, sir. The next question comes from Kaustab Pavastar from ICSA Direct. Please go ahead.
Yeah. Good afternoon, sir. Thanks for... So, my question is on the margin trend. So, if we look into the first half EBITDA margins, they were around 15%. You, in the call, you know, mentioned that for the entire year, you are expecting EBITDA margins to be around 17%. So, that indicates that H2, we should... We expect, you know, profitability to be much better than H1. So, you know, I just want to understand, you know, what confidence this, you know, gives us so that H2 should be much better in terms of profitability, considering the fact that, you know, the raw material pressure is going to be there maybe for a quarter or two.
Historically as well, our H2 margin profile has always been significantly better than H1 profile, of course, due to the seniority of our business, as well as the operating level, it kicks in because of it, right? So, we believe that our quarters, we are very, very geared up for a very strong quarter 3 and quarter 4, and that gives us the confidence that we will be able to sustain and deliver the 17% EBITDA detection that we are offering you right now. We, like you mentioned, the input pressure is not moving. We believe that eventually... This input pressure will also taper off and will flow into our margins at some stage. Of course, there is no fund in force asking when that day will happen, but we believe that the input pressure with crude also kind of going down southwards for the last three days, we believe that that should flow into the ecosystem sometime in January. Now, there are multiple work that we are working on to ensure that our margin profiles stay consistent and in line with what our performance and our interests are.
Sir, are we looking for any further price hike in our portfolio or there won't be any further price hike?
So, it will depend, right? Like, fortunately, the food has left it today, as we see. So, if it's a change, we don't need to take another price sign. But, unfortunately, if it does, then we'll have to take another price sign.
And, sir, one clarification. In a recent comment, you mentioned that about 2000 has grown by 50% and the contribution is around 10%, right, in terms of volume? Is it right? And, sir, where do you expect the contribution of about 2,000? You know, I don't want to object this thing, but over the next two to three years, since you have been, you know, entering into, you know, too many categories and the categories of growth, these are most of them are categories of growth. So where do you expect this about 2,000, you know, contribution going ahead over the next two to three years?
So, I mean, I would not want to put a number to it, but all the categories that we are currently focusing on, be it performance, be it Elan, be it speakers, right, all these are PSP accredited categories. The best thing about this entire direction that we are talking about is that one of the largest chunk of growth is coming from a general state business. Our other businesses were already poised to sell higher MRP, your D2C businesses or your modern trade businesses were already tuned to selling a higher profile of products. Over the last 18 to 24 months, we have seen a very massive growth in the share of premiums in our general trade business through product intervention as well as other trade interventions. So the heartening thing is that that is growing and we believe that the growth will continue. So, I mean, I would not want to put a percentage number, but you will see a positive trend going ahead for a significant period of time. All right, sir.
Thank you. Thanks for coming.
Operator
Thank you, sir. We are participants. If you have any questions, please press star and one on your telephone keypad. First question comes from Bavish Jain from DV Investment Advisor. Please go ahead.
Sir, thank you for the opportunity. Just a remaining follow-up on that balance with government authority figure. So, just wanted to ask why the competitors don't see this amount on their balance sheet, and is it specifically related to us?
In our case, most of our portfolio sits in the 5% output bracket and plus we are the only or one of the very few companies that does such a high AMP spend on the brand marketing Therefore, we accumulate significant amount of input credit on the services side, which we are unable to offset because most of our portfolio sits in the 5% bracket. So that is where the mismatch sort of happened. But now that with the new GST ruling coming in, it will now offset all of that as well. I hope that clarifies.
Yeah. Okay, sir. Thank you. Thank you so much.
We are carrying around 600 plus crore inventory in our box, right?
So you should read it like 15% we are already on an average basis, 15% GST we are paying by buying the materials, right?
So it will move in line with the inventory level what we are carrying in the box. Okay, it will never get zero because always you will be carrying certain level of inventory for the business, right? But it will move in line with the inventory level what we are carrying for the business.
Operator
Thank you, sir. The next question comes from Devanshu Bansal from MK Global. Please go ahead.
Yes, sir. Hi. Thanks for the follow-up opportunity. Sir, you're sort of...
Operator
Hello, Mr. Devanchu. So, there is no response. Your participants, if you have any questions, please press star and one on your telephone keypad. Again, the question comes from Devanshu Bansal from MK Global. Please go ahead.
Hi, apologies. Am I audible now?
Yes, also if you're pressing pedal on EBO expansion, so obviously a full store requires a good amount of range as well, right? So in terms of display, etc. So wanted to check if you could share some thoughts around how you have sort of worked upon that, maybe walking, running, kids, slippers, etc. Whatever new initiatives that you have taken will be really helpful.
So, I mean, we've just recently launched a new format of a retail identity in Rupanagar in Delhi, which was a new store identity that we've just launched, which was inaugurated by Gautam Gambhir, right? And a lot of images and videos, and in case you're in Delhi, would love you to visit that location. It helps you understand how we are trying to communicate and talk to consumers and, you know, really bring the products to life. On the product category that you mentioned, by default, a new retail store today will have sections of all categories that we are focusing on. The early categories of men, women, kids, and within men, running, walking, and lifestyle would remain the way they were. Along with that, there will be by default an apparel section that gets built into the newer store that we opened, as well as an elan section that brings. As of today, we do not have a separate section for performance yet, so we do not have a wide enough portfolio, but eventually once that category becomes big enough, there will be a separate section for performance software as well, right? Kids will get incorporated within the same segment. In case required, we will be adding certain flow units to accentuate the range of smaller kids, which is the 1-5 year segment, which is not a very big category in our stores. So, all these categories will be represented well within our retail ecosystem. Our store sizes will go a bit bigger now. We are working in a 6 to 7. Thank you.
And, Uplat, so your brand philosophy around comfort value at very various sharp points sort of applies to apparel as well, as in this is how we are sort of differentiating?
Yeah, absolutely. The same values apply to apparel as well. Whatever category we do has to have very high value proposition. That has been the genesis of our entire, you know, position.
Thank you, Nikhil. Thank you, team, for taking my questions. Thanks.
Operator
Thank you, sir. Dear participants, if you have any questions, please press star and one on a telephone keypad. Dear participants, if you have any questions, please press star and one on a telephone keypad. Thanks, everyone. As there are no further questions, we would conclude this call. In case of any further queries, please reach out to the Campus Activewear Investor Relations team at ir.campuschoose.com. Thank you for joining us, and you may disconnect your lines now.
