campus activewear ipo price: 90% rally over IPO price! Can this newly-listed stock offer further gains? – Blue Barrows

Campus Activewear has nearly doubled since its IPO of Rs 292, rising 90 per cent to Rs 557, but brokerage Prabhudas Lilladher’s target price suggests a limited upside for the stock.

The brokerage has initiated coverage on recently-listed Campus Activewear with a buy rating and a target price of Rs 570. The stock has been buzzing of late as it has rallied over 16 per cent in the past week and 27 per cent in the last month.

“Building a successful brand in the consumption space entails differentiation in products and positioning, strong supply chain capabilities and a go-to-market strategy, and Campus has acknowledged these aspects by correctly identifying the opportunity for branded play in the economy and mid of the pyramid in the S&A footwear segment,” Prabhudas Lilladher said.

Campus Activewear is the leader in India’s fast-growing sports and athleisure (S&A) footwear segment(at Rs 110 billion, growing at a CAGR of 15 per cent), with a value market share of 17 per cent. The company had launched its IPO in April. It had listed at a premium of over 20 per cent on NSE at Rs 360.

“The company has manufacturing and supply chain capabilities that are difficult to replicate. It offers a well-terraced portfolio offering (SKUs cover > 85 per cent of India’s S&A footwear segment), and has created an omnichannel distribution network,” the brokerage firm added.

These initiatives have not only driven Campus’s healthy outperformance vs peers but also provide assurance on the future runway for growth in the already fast-growing S&A segment, it said.

The thrust on differentiation and the ability to continuously evolve provides comfort to the company’s execution capabilities, it said. With execution machinery in place, the stock provides a troika of growth, profitability, and improving cash flows, which Prabhudas Lilladher believes justifies its premium valuation. The brokerage initiated coverage on the stock with a buy rating and a DCF-based target price of Rs 570 per share, suggesting an upside of 5 per cent from the previous close.

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