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Liberty Shoes Ltd. | Visit Note




IndiaNivesh Securities Pvt Ltd


25 Apr 2014





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Liberty Shoes Ltd. | Visit Note Liberty Shoes Ltd (LSL), incorporated in 1986, is the second largest footwear company in India. Apart from its flagship brand ‘Liberty’, the company manufactures and sells footwear in 10 more brands including Senorita, TipTopp and Glider. With a manufacturing capacity of 10.6 mn pairs per annum, the company’s plants are located at Karnal (Haryana), Dehradun and Roorkee (Uttarakhand) and Poanta Sahib (Himachal Pradesh). We met the management of the company to understand the business model and future prospects of the company and following are the key takeaways: < Focus on increasing retail revenues < Integration of front end and back end facilities < Capex < Intends restructuring with group companies < Merger of Liberty Revolutions Retail Ltd. Valuation: At current market price of Rs 181, the stock trades at PE of 23.4x its FY14 earnings of Rs 7.8 per share. The company is eyeing revenue growth of atleast 25% in FY15E and is charting an aggressive expansion in its stores to achieve high growth rates in future. Considering the strong brand recall, expansion plans and strategies to improve its growth rate, we are of the opinion that the valuation is attractive. Its peers, Bata India and Relaxo Footwear are trading at 36.5x and 40x its TTM earnings. We do not have any formal rating on the stock.

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