Best Footwear Stocks in India

Best Footwear Stocks in India 2024 as per Analyst Ratings

Here are the top footwear stocks in 2024 as per the BUY Analyst Ratings provided by the I/B/E/S database. We have used Analyst Rating as a criteria here as the analysts run an across-the-board analysis of the market considering the company financials, market predictions, etc.

Here’s the list of top footwear shares according to the BUY analyst ratings-

Best Footwear Shares in India in 2024 (as per Market Capitalization)

Here, we have listed down some of the top footwear sector stocks as per market capitalisation.

Overview of Top Footwear Stocks in India as per Analyst Ratings and Market Capitalisation

Here is a brief overview of the best footwear sector stocks as per analyst ratings and market capitalisation mentioned above-

1) Campus Activewear

Campus Activewear, a leading India-based footwear company, was founded in 2008. It is primarily engaged in manufacturing sports and athleisure footwear. The brand offers various choices across colour palettes, styles, and price points for men, women and kids. It targets the value segment of the market. 

For the fourth quarter of FY24, the company recorded net sales of Rs 364 crore. In comparison, in the third quarter, it had net sales of Rs 472 crore. Year-on-year (YoY), in the March 2023 quarter, net sales stood at Rs 348 crore, a rise of 4.6%.

In the September quarter, net sales were Rs 259 crore, while in the June quarter, it registered net sales of Rs 354 crore. Profit after tax (PAT) stood at Rs 33 crore, compared to Rs 25 crore in Q3 ending December 2023, and up sharply from Rs 0.32 crore in September 2023. In the quarter ended June, PAT came in at Rs 31 crore.

For the nine months of the current financial year, the company notched up net sales of Rs 1,085 crore, compared to Rs 1137 crore in FY23 and Rs 863 crore in FY22. PAT for the nine months of the current year stood at Rs 56 crore, compared to Rs 94 crore in FY23 and Rs 79 crore in FY22.

As of March 31, 2024, the company had a debt-equity ratio of 3.6%. This is considered high. Operating cash flow stood at Rs 264 crore, which not all analysts consider to be sufficient. 

For Q4 FY24, EPS was Rs 1.07, up from Rs 0.75 YoY, and the profit margin at 6.15% was down from 7.88% YoY. This is the result of 2024. 

2) Metro Brands

Metro Brands was founded in 1977. It is one of the most renowned brands in India, offering a vast catalogue of footwear. The company is currently operating across 800+ stores in 192+ cities across Indian states and Union Territories.

The company offers multiple products under its own brand names. These include Mochi, Metro, Da Vinchi, Walkway, and J Fontini, as well as other third-party brands such as Skechers, Crocs, Fila, Clarks, Puma, and Adidas.

For the fourth quarter ended March 2024, Metro Brands notched up net sales of Rs 583 crore, down from Rs 636 crore in Q3 FY24. In the year-on-year (YoY) quarter of March 2023, net sales stood at Rs 544 crore. In Q4 FY24, profit after tax (PAT) stood at Rs 156 crore, up from Rs 99 crore in December 2023. For the March 2023 quarter,  PAT came in at Rs 69 crore. In the September quarter, PAT stood at Rs 68 crore, and in the June-FY24 quarter, PAT stood at Rs 94 crore.

For the nine months of FY24, the company recorded net sales of Rs 1,775 crore, compared to Rs 1,583 crore in FY23 and Rs 1,128 crore in FY22. PAT for the nine months of FY24 was Rs 261 crore, compared to Rs 297 crore in FY23 and Rs 198 crore in FY22.

For Metro Brands, in the immediate future, the softness in demand is expected to persist. It is also liquidating the Fila inventory and closing the exclusive brand outlets. It plans to rebuild the brand. Metro Brands caters to customers in the mid and premium segments, where spending power is greater than that in the value segment.

3) Bata India

Bata India, arguably the most popular footwear brand in India, was founded in 1931. The company is a major manufacturer and trader of footwear and operates through a widespread retail and wholesale network.

Some of its popular brands include Bata Comfit, Hush Puppies, Weinbrenner, Scholl and many more. Bata India has garnered immense trust and popularity over the years with its range of footwear catering to men, women and children across all ages and segments of society. Apart from footwear, the company offers products such as wallets, handbags, t-shirts, joggers, and more.

For the fourth quarter of FY24, Bata India recorded net sales of Rs 798 crore. This was down 11.63% from Rs 903 crore in the December quarter. This was largely due to the festival season effect. YoY net sales stood at Rs 779 crore in March 2023. In the September quarter, the figure stood at Rs 819 crore, while it came in at Rs 958 crore in the June quarter. 

In Q4 FY24, PAT stood at Rs 64 crore, up from Rs 58 crore in the December quarter and slightly down from Rs 66 crore in Q4 FY23. In the September quarter, PAT came in at Rs 34 crore, while in the June quarter, it was Rs 107 crore due to lower sales. 

For the nine months of FY24, the company had net sales of Rs 2,680 crore, compared to Rs 2,673 crore in FY23. In the two previous COVID years, the numbers were lower, at Rs 1,197 crore in FY21 and Rs 2,485 crore in FY20. PAT for the nine months of FY24 was Rs 199 crore, compared to Rs 257 crore in FY23. This fall in PAT was due to weakness in the mass market segment. However, strong sales in the premium segment supported the numbers. In FY21, it came in at Rs 120 crore, while in FY20, the company recorded Rs 428 crore.

Bata targets the young segment looking for affordable and fashionable products, besides quality and cost-conscious middle-class.

4) Relaxo Footwears

Incorporated in 1984, Relaxo Footwears is a leading footwear player in India. It has gained major popularity in the market due to its three brands, namely Bahamas, Flite, and Sparx.

Relaxo Footwears offers an extensive range of products that include flip-flops, sports shoes, sandals, and slippers. The company distributes its products nationwide through retail outlets and e-commerce websites.

For the fourth quarter of FY24, Relaxo notched up net sales of Rs 747 crore, up 4.8% from Rs 713 crore in the December quarter and YoY (March 2023) number of Rs 765 crore.

In the September quarter, it came in at Rs 715 crore and in the June quarter, net sales stood at Rs 739 crore. In Q4, PAT came in at Rs 61 crore, up 56.4% from Q3 FY24 at Rs 39 crore, and Rs 63 crore YoY. In the September quarter, it stood at Rs 44 crore and in the June ended quarter, PAT was at Rs 56 crore. Better gross margins, cost control, and the previous year’s price cut have helped the company.

For the nine months ended 2023, the company had net sales of Rs 2,167 crore, compared to Rs 2,018 crore in the previous year same period. For December ending 2021, net sales stood at Rs 1,973 crore, up over 21% from Rs 1,627 crore in the corresponding period last year. 

PAT for the nine months ended December 2023 came in at Rs 139 crore, compared to Rs 91 crore in the previous year corresponding period. In December 2021, 9 months’ PAT came in at Rs 170 crore, while in the previous year, it was Rs 189 crore.

Weakness in demand is an industry-wide phenomenon. According to the management, the company will strive to expand its product portfolio by rolling out new designs, styles, and categories. It will also enter new geographies to expand its market share.

Relaxo targets the mass consumption segment with low-priced products like slippers (chappals) and sandals. This segment accounts for 85% of its sales.

5) Mirza International

Mirza International was established in 1979. It is India’s leading leather footwear manufacturer, marketer, and exporter. It has a strong presence in over 28 countries, where it offers a wide range of footwear products.

Currently, the company’s domestic and export divisions manufacture footwear and other leather-based products for the Indian and global markets, respectively.

This company is known as the maker of the Red Tape brand. Effective February 25, 2023, Red Tape was demerged from Mirza International, and group company RTS Fashions was amalgamated with Mirza International. The record date of this transaction was March 29, 2023.

This company targets fashion-conscious consumers with the requisite spending power. 

In Q4 FY24, Mirza International recorded net sales of Rs 152 crore. This is in comparison to Rs 142 crore in Q3 FY24. In the March 2023 quarter, YoY net sales stood at Rs 161 crore.

In the September quarter, the company had net sales of Rs 209 crore, and for the June quarter, net sales stood at Rs 128 crore. In Q4 FY24, PAT came in at Rs 1.2 crore; it stood at Rs 4.4 crore in the third quarter. YoY PAT was Rs 3.2 crore in FY23, a fall of 63%. PAT was Rs 4 crore in the September quarter, and in the June quarter, it was Rs 2.4 crore.

For the nine months ended December 2023, the company had net sales of Rs 479 crore, compared to Rs 492 crore in the previous year same period. A slowdown in demand and the effects of the demerger were responsible for this sharp downturn. For December ending 2021, net sales stood at Rs 1,234 crore, up over 68% from Rs 736 crore in the corresponding period last year. Analysts have advised extreme caution on this stock.

Factors to Consider Before Investing in Footwear Stocks in India

While searching for footwear stocks, make sure to consider the following factors -

• Market Trends and Demand

Consumer preferences, fashion trends, and purchasing patterns directly affect the demand for footwear. Styles change fast in the footwear market. Urbanisation, too, plays an important role in the demand scenario for this industry. Study these factors closely before investing in footwear stocks.

• Competitive Scenario

The Indian footwear industry is highly competitive. It is divided into organised and unorganised sectors, catering to a highly price-sensitive and fashion-conscious consumer base. The players in the organised sector use technology and the latest marketing tools to enhance the attractiveness of their products and to expand their market share.

Therefore, those looking to invest in this space should study the market share of the key players, their distribution channels, and pricing strategies to make the right choice.

• Financial Performance

Another important factor to consider is the financial performance of footwear companies. Before investing in any footwear company, look at its revenue growth, return on investment (RoI), profitability margins, future prospects, etc. Check if these indicators are consistent and reflect a strong balance sheet.

• Brand Reputation

Brand reputation plays a key role in the growth of the footwear industry. Depending on their experience with brands, consumers step up to pay more for products that deliver on promises.

Therefore, consider this factor and check the brand loyalty metrics, customer reviews, and customer base to get a better understanding of the company and its product and marketing ethos.

• Customer Touchpoints

Indian footwear companies primarily operate through retail stores, online platforms, and partnerships with wholesalers and distributors. This makes it necessary for prospective investors to assess the distribution channels utilised by each footwear company.

Those with a robust omnichannel presence and effective distribution networks will likely enjoy a sound competitive advantage.

• Supply Chain and Manufacturing

Consider the efficiency and resilience of the supply chain and manufacturing processes of footwear companies. Check aspects such as manufacturing costs, geographical diversification of manufacturing facilities, production capacity, etc., to understand the scale.

Also, in the current environment-conscious scenario, prospective investors should look at the environmental sustainability of the company’s operations.

Should You Invest in Footwear Stocks?

The footwear industry depends heavily on fashion trends, customer preferences, and seasonal demand. Though it has been scaling up its operations, some setbacks are always likely to come in the way.

Hence, if you have a keen interest in investing in footwear stocks, be sure to consider the growth prospects, market demand, brand strength, and competitive advantage of the companies in the space.

Conclusion

Footwear stocks have performed consistently on the stock markets. This is thanks to a robust supply chain, consistent innovation, and brand loyalty, among others.

However, while committing your money, it is important that you keep your investment objective, risk tolerance, financial performance of the companies where you want to invest, and growth opportunities of the industry in sharp focus, and then arrive at a decision.