The Indian footwear industry is poised for a healthy growth of 8-9% over FY24E-32E (8% over FY20-25E) fuelled by a shift in consumer perception of footwear transitioning from a mere utility item to more as a fashion statement. The desire for global fashion brands, higher aspirations, and increased digital usage are boosting the demand for branded footwear. Sports & Athleisure segment is expected to outpace the industry growth by growing at a CAGR of 15% over FY24E32E (15% over FY20-25E). Women footwear is another segment which will lead the growth of footwear industry in the coming years with rise in number of women workforces. The implementation of BIS Standards in the footwear sector is poised to enhance the quality of domestically manufactured footwear, creating avenues for Indian players to capitalize on export opportunities. While the demand in FY24E has been subdued due to a high base and weak consumer sentiments, the growth is expected to pick-up from FY25E. We initiate coverage on Campus Activewear and Metro Brands with “BUY” rating, while “SELL” on Relaxo.
Initiate coverage on sector leaders We initiate coverage on the three key footwear companies. Based on the current valuations and growth outlook over FY24E-26E, we have assigned BUY ratings to CAMPUS (TP: Rs294, 30% upside), BUY ratings to METRO (TP: Rs1338, 19% upside) and SELL rating to RLXF (TP: Rs763, 8% downside)
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