The share price of footwear manufacturer Campus Activewear rose on June 28 after foreign brokerage house CLSA India initiated coverage on the stock with a "buy" rating and a price target of Rs 370, implying an upside of 12 percent from the current level.
“Strong backward integration and design capability, a price-straddle approach in product offerings and an expanding omni-channel network lend Campus its leading position,” CLSA said in a note.
The company is one of the biggest players in the sports and athleisure footwear market, which is seen as a high-growth segment of the industry.
In April, the company brought an initial public offer of over Rs 1,400 crore, which was received well with the stock listing at a 23 percent premium to the issue price of Rs 292 a share.
CLSA India expects the company’s revenues to grow three-fold and operating profits to rise four-fold alongside improvement in margins over the next three years.
Analysts, prior to the listing of the stock, had recommended investors to subscribe to the IPO, saying the company’s high growth trajectory would likely be sustainable over the next decade.
In the last 10 years, Campus Activewear has grown volumes at the rate of 20 percent per annum, which has been a driving factor in the stock’s premium valuations to other listed peers in India.
At 11.15 am, shares of Campus Activewear were up 1.6 percent at Rs 335.1 on the National Stock Exchange.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.