Mehabe score: 2 G Factor: 2 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 3.
Description
Khadim’s, established in 1981 as S.N. Footwear Industries Private Limited was involved in the whole-selling and distribution of branded basic utility footwear. From 1993, it forayed into retailing and emerged as a popular fashion footwear brand. Its business objective is ‘Fashion for Everyone’, and it has an identity as an ‘affordable fashion brand. #
Main Points
Brand Reputation
It is the 2nd largest footwear retailer in India
Largest presence in East India
One of the top 3 players in South India
Largest footwear retail franchise network in India.#Site:KHADIM
Market Cap:
Rs 349 cr
Price:
194.0
Trading pe:
x
Book-value:
103/share
Div yield:
0.00 %
Earning yield:
-7.19%
Face-value:
10.0/share
52week high:
216.00
52week low:
99.55
Technical Analysis
Stock trades at 194.0, above its 50dma 161.3. It also trades above its 200dma 144.76. The stock remains bullish on techicals
The 52 week high is at 216.00 and the 52week low is at 99.55
Price Chart
P/E Chart
Sales and Margin
Strengths
–
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 10.90% over past five years.
– has a low return on equity of 3.52% for last 3 years.
Competition
– The industry trades at a mean P/E of 68.3x. Mirza Internatio trades at the industry’s max P/E of 124.98x. KHADIM trades at a P/E of x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 8.0. KHADIM has a G-Factor of 2 and Piotski scoreof 3.
– Average 1 month return for industry is 20.0%. The max 1- month return was given by Sreeleathers: a return of 33.44 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 270.0 cr compared to Rs 158.0 cr for period ended Mar 2020, a rise of 70.9%
Company reported operating profit of Rs 14.0 cr for period ended Mar 2021, operating profit margin at 5.2 %.
Operating profit was negative for the same period last year thus company has improved its margins this year
The EPS for Mar 2021 was Rs 6.43 compared to Rs 2.47 for previous quarter ended Dec 2020 and Rs -11.05 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 626.0 cr for period ended Mar 2021 vis-vis sales of Rs 772.0 cr for the period ended Mar 2020, a fall of 23.3%. The 3 year sales cagr stood at -5.8%.
Operating margins shrank to 1.0% for period ended Mar 2021 vis-vis 5.0% for period ended Mar 2020, contraction of 400.0 bps.
Net Profit reported at Rs -33.0 cr for period ended Mar 2021 vis-vis sales of Rs -31.0 cr for the period ended Mar 2020, falling 0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -12.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 50% on a 1 Year basis vis-vis a return of -38% over the last 3 Years. – The compounded sales growth on a TTM bassis is -37% vis-vis a compounded sales growth of 8% over the last 3 Years. – The compounded profit growth on a TTM basis is -532% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 0.04% vis-vis 0.04% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 23.64% vis-vis 23.45% for Dec 2020
Conclusion
– – has low interest coverage ratio.
-The company has delivered a poor sales growth of 10.90% over past five years.
– has a low return on equity of 3.52% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 161.3 and is trading at 194.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
