Few positives for the co.
- One of the best in the industry in growth and ROCE
- Price corrected a bit as Q2 result was not good. Reason is the shift of festival to Q3 (as per other co managements). So, Q3 should be good YOY
- One of the cheapest value in Footwear space
- Global Footwear industry is growing at 12% and Indian industry to grow at >20% in this decade. So, the valuations of the Footwear cos will sustain
Negatives:
- Most of Footwear is imported from Bangladesh (If memory serves right). Recent increase in minimum wage hike will impact the gross margins
- Increasing competition in this space as it offers high growth and valuations are high. (Everyone went into paints sector as the by investing 5000 cr you can make 500 cr PAT and at 50x valuation would valued the co at 25k marketcap). Whatever happened in paints may repeat but as of now no brand launches from Big conglomerates (JSW, Reliance, etc…) only time will tell
- In case of loss in market share to new players (Asian, Campus, etc… and some new entrants)
Disc: Holding and biased
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