Mehabe score: 5 G Factor: 3 Piotski Score: 7 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 3 and Piotski score of 7.
Description
Liberty Shoes Ltd is engaged in the business of manufacturing and trading of footwear, accessories and lifestyle products through its retail and wholesale network.[1]Site:LIBERTSHOEMain Symbol:LIBERTSHOE
Stock trades at 178.0, above its 50dma 171.5. It also trades above its 200dma 155.87. The stock remains bullish on techicals
The 52 week high is at 215.90 and the 52week low is at 115.90
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
Weakness
– Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.17% over past five years.
– has a low return on equity of 2.72% for last 3 years.
Competition
– The industry trades at a mean P/E of 25.4x. Bata India trades at the industry’s max P/E of 1021.81x. LIBERTSHOE trades at a P/E of 30.2x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 7.0. LIBERTSHOE has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 8.2%. The max 1- month return was given by Khadim India: a return of 33.11 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 111.7 cr compared to Rs 96.93 cr for period ended Sep 2020, a rise of 15.2%
Operating Profits reported at Rs 10.07 cr for period ended Sep 2021 vis-vis 10.13 for period ended Sep 2020 .
Operating Margins contracted -143.6 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs -0.06 compared to Rs -1.8 for previous quarter ended Jun 2021 and Rs -0.95 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 519.0 cr for period ended TTM vis-vis sales of Rs 458.0 cr for the period ended Mar 2021, a healthy growth of 11.8%. The 3 year sales cagr stood at -4.8%.
Net Profit reported at Rs 10.0 cr for period ended TTM vis-vis sales of Rs 0.0 cr for the period ended Mar 2021, rising 100.0%.
Company recorded a healthy Net Profit CAGR of 12.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 21% on a 1 Year basis vis-vis a return of 1% over the last 3 Years. – The compounded sales growth on a TTM bassis is 4% vis-vis a compounded sales growth of -6% over the last 3 Years. – The compounded profit growth on a TTM basis is 205% vis-vis a compounded profit growth of -65% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Sep 2021 public holding stood at 40.69% vis-vis 40.7% for Jun 2021
Conclusion
– has reduced debt. – Though the company is reporting repeated profits, it is not paying out dividend
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.17% over past five years.
– has a low return on equity of 2.72% 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 171.5 and is trading at 178.0 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
