Multibagger Stock: This footwear company shares hit multi-year high; yields almost 100% return in 1 month

Small-cap footwear company – Liberty Shoes share price has touched a multi-year high of Rs 344.5 and Rs 344.4 apiece, after gaining nearly 4 per cent on the BSE and NSE intraday, respectively, during Tuesday’s trading session on the back of healthy outlook. The stock also hit 52-week high of Rs 346.80 today on the NSE. It had last touched a record high of Rs 351 apiece on July 22, 2014.

The stock has given a multibagger returns in a month as it almost doubled from Rs 170 to Rs 305 this month. At around 02:35 PM, the counter was up over 3 per cent to Rs 342 per share on the BSE as against over 2 per cent rise in the S&P BSE Sensex. 

According to Centrum Broking, "The Indian footwear industry is a long-term structural story with multiple growth drivers in place. India’s per capita footwear at 1.9x is well below global per capita of 3x and developed countries’ (US, UK) per capita of 7x.”

Footwear industry grew at a healthy CAGR of 9 per cent from Rs 475 bn to Rs 720 bn over FY15-20 before being disrupted during the pandemic, the domestic brokerage said, adding that the footwear industry is expected to grow at 8 per cent CAGR over FY20-25 to Rs 1050 bn.

Premiumization, casualization, and digitization are the possible key trends going forward in the sector, Centrum Broking also pointed out.

Liberty Shoes caters to all sections of society and makes ten different brands to market in the domestic and international markets. The brands are Leap 7X, Healers, Lucy & Luke, and Aha among others. The company currently has the capacity to manufacture over 50,000 pairs a day.

While CARE Ratings reaffirmed the ratings assigned to the bank facilities of Liberty Shoes with a 'stable' outlook. The ratings factor in improved operational performance in FY22 and the first quarter of FY23 (Q1FY23), marked by improved capacity utilisation, better absorption of overheads, wide distribution network, comfortable capital structure and geographically diversified revenue stream.