Is your foot in the right shoe? 4 footwear cos which gave stellar returns in 10 yrs

Moneycontrol News

Footwear companies have consistently outperformed the benchmark index S&P BSE Sensex for some time now. Naturally, for investors who reposed faith in these companies, phenomenal returns have been the norm. Take, for example, Relaxo Footwear. The New Delhi-based company gave a share price return of over 7400 percent over the last 10 years. About Rs 15000 invested in it a decade ago is now worth over Rs 1 crore.


In order to understand these footwear companies’ performance, Moneycontrol analyzed their select fundamentals. Here are the findings.

High price to earning ratio

All stocks are trading with a very high premium to their five-year average P/E ratio.




Major shareholders (FIIs, MFs & promoters) position

Over the last six quarters, shareholder data of these four companies shows that mutual funds and foreign institutional investors have incrementally raised their stake in Relaxo Footwear. However, in Bata Indiainstitutional holding has fallen over the same period but in percentage terms, they have a higher holding in the stock.


In all these four stocks, however, promoter holding since March 2016 has remained the same.

Topline and Bottomline growth: Relaxo in spotlight

These four listed companies’ top line growth remained muted in FY17. Relaxo saw a significant decline in sales growth as compared to its past five fiscal years but was able to post a positive bottom line growth.

However, Bata India and Liberty Shoes witnessed a de-growth in net profit for the second consecutive fiscal year.

In PAT margin performance, Relaxo Footwear proved to be the best among its peers as it continuously increased its margins each year from 4.41 percent in FY12  to 6.98 percent in FY17. But Bata India’s PAT margin has been shrinking over the years from 9.19 percent to 7.02 percent in the same period.


Prima facie, Bata India’s dependence on borrowed funds was less amongst the four. In general, all footwear majors have been fundamentally healthy on this front, as apparent from a low debt-equity ratio of each company in each of the 5 years. There has been a steady decline in the debt-to-equity ratio of Mirza and Relaxo over a period of time.

Relaxo’s ROCE (return on capital employed), which was previously lower than Bata’s, has been the highest amongst its peers in the last 3 fiscals. Consequently, a similar trend is visible in return on net worth.


Amongst all four companies, Bata India has given the highest dividend per share in all the last five fiscal years.

GST Benefit

The organized sector is likely to benefit from Goods and Services Tax roll out as smaller players will most likely wither away.

Facebook Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

Fashion Footwear

Global Industrial Protective Footwear Market 2017 Covering USA, Europe, China, Japan, India, South East Asia

The report titled Global Industrial Protective Footwear Market 2017 provides the intrinsic research study based on qualitative and the quantitative aspect of the Industrial Protective Footwear industry along with a complete description of top market Read more…


This Iconic French Rainboot Brand Is Taking Its Product Direct to Consumers

Le Chameau Andalou equestrian style boot. Courtesy of brand Nearly a century ago, French entrepreneur Claude Chamot, an agricultural engineer, was determined to beat the elements by creating a waterproof boot that could withstand the Read more…

Footwear Industry

Rip-off shoes racket busted

Ahmedabad: The branded shoes you bought through a shopping portal might be a ‘first copy.’ A team of state police’s CID (crime) raided a warehouse in Surat and seized more than 3,000 pairs of footwear on Friday. Police have Read more…