India Ratings Affirms Campus Activewears LT rating

19 Nov 2022 , 09:23 AM

India Ratings said that the positive outlook reflects a sustained premiumisation of the portfolio and strong volume growth in H1 FY23, resulting in a substantial increase in the revenue, and the likelihood of continued growth over the second half of the year while maintaining a strong credit profile. Moreover, after the initial public offering and listing in May 2022, the companys corporate governance and financial disclosures have improved. The rating agency further stated that a significant improvement in revenue along with profitability by way of increasing the share of premium products, while maintaining the credit metrics, will be positive for the ratings. However, lower-than-expected revenue diversification and/or a deterioration in the EBITDA margins, higher working capital requirements, or a large debt-funded capex, leading to the net leverage (net debt/ EBITDA) exceeding 1.5x, on a sustained basis, could result in the outlook being revised to stable. Campus Activewear commenced the commercial operations as Ankit International in August 2015. The company is a part of the Hari Krishan Agarwal group of companies within the larger Action Group, which has been in the footwear business for over three decades. The company reported 48.51% drop in net profit to Rs 14.54 crore on a 22.04% rise in sales to Rs 333.17 crore in Q2 FY23 over Q2 FY22. The scrip tumbled 4% to end at Rs 426.50 on the BSE yesterday. Powered by Capital Market – Live News