Footwear stocks are trading higher for the second straight day in a row in a weak market today. Shares of Relaxo Footwear hitting a new high, while Bata India trading close to its record high on the BSE in today’s trade.
Bata India Ltd is currently trading at Rs828 up by Rs11.3 or 1.38% from its previous closing of Rs816.70 on the BSE.
Bata operates through ~1,300 retail stores with brands like Bata, Hush Puppies, Bubblegummer etc. Company plans to open 100 new retail stores via the company owned-company operated stores to increase its presence in malls and high-street locations in next one year. To tap opportunities and expand footprint in Tier II and Tier III markets, it plans to appoint 250 more franchises in next 3-4 years. Company aims to scale up women’s category share in the product mix to 35% by FY19E (27-28% in FY18).
Liberty Shoes Ltd is currently trading at Rs218.10 up by Rs18.15 or 9.08% from its previous closing of Rs199.95 on the BSE on back of heavy volumes.
Liberty Shoes is engaged in the business of manufacturing and trading of footwear and accessories through its retail and wholesale network. The Company's offering includes casual shoes, wedge shoes, designer shoes etc. The Company has six manufacturing units with a capacity of 50000 pairs per day.
Relaxo Footwears Ltd is currently trading at Rs736 up by Rs25.25 or 3.55% from its previous closing of Rs710.75 on the BSE. The stock hit a new high in the early trade today.
Relaxo Footwear (Relaxo) is engaged in manufacturing and trading of footwear primarily made up of vulcanized/ moulded rubber. Company’s major revenue consists of ~20%, ~35% and ~35% from Bahamas, Sparx and Flite respectively. We expect Relaxo to report revenue CAGR of ~12% over FY18-20E led by shift in demand from unorganised (more than 60% market share) to organised sectors due to GST. We estimate margin expansion due to increase in the realisation rate aiding PAT CAGR of ~15% over FY18-20E. We expect company to become debt free by FY20E at net debt level. Stock currently trades at 40x FY20E EPS.
Khadim India Ltd is currently trading at Rs816.20 down by Rs2.4 or 0.29% from its previous closing of Rs818.60 on the BSE.
Khadim India derived its revenue for FY17 from retailing (73%) and distribution (B&R, 22%) of footwear. The company has been able to grow its revenues at 10.1% CAGR over FY13-17. The company runs its retailing business through Company Owned and Operated (COO) stores and Franchisee stores. COO stores account for 168 stores as on 1QFY18 while franchisee stores account for 685. The distribution is run through multi–brand retailers and national retail stores.