Q3 results look good & encouraging even with most of non-BIS inventory being liquidated now
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Competition incoming bad for domestic brands as last 1-2 years saw no incoming of high quality demanded import shoes. Can be good for metro as they can now import new shoes in their footlocker and other space.
This will not impact campus much,but competition will increase.Campus have already entered in premium segment i.e above 1500 rs.Campus ASP is 625. Their shoes are mainly prerferred by people with limited budget.Lets see have story play out.
Yes I believe Campus must be looked at now! …Everything seems to be falling together …decent valuation…Good growth in sneaker category…margins have scope to expand due to operating leverage…non-BIS compliant inventory will be out the way soon…and tax cuts will further drive consumer discretionary spends.
Disclosure - Invested. No transactions in past 30 days.
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I think it is still expensive if you compare with Bata which has similar sales growth but higher ROCE and higher OPM and is available at 43PE whereas Campus is still at 58PE. Hence its better to wait till either price drops or earnings improve to arrive at reasonable valuation
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With GST rate cut from 12% to 5% and the consolidation of its three raw material warehouses (80,000 pairs/day total capacity) into a single new warehouse (potential 200,000 pairs/day throughput) and ASP moving up by almost 100 rupees, the worst is over for the company.
Disc: 2.5% invested.
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