The Rs. 960b Indian Footwear market (FY20) is witnessing a unique transformation over the last few years. Improved fashion quotient is driving demand, especially for Casual, Athleisure, Sneakers and Women's footwear, etc. Here, 1 mid cap and 1 large cap footwear stocks have been discussed, Motilal Oswal suggests investors to buy for high returns.
Metro Brands - stock performances
The current market price of the company is Rs. 886.50/ share, and Prabhudas Lilladher has estimated a target price for the stock at Rs. 1,000/share, and given buy rating. In the last 6 months it has given 54.83% returns, in the last 1 year it has given 79.69% returns, and in the last 5 years it has given 88.44% returns. Its 52-week high market price is Rs. 939.90, and 52-week low market price is Rs. 426. This largecap stock's market capitalization is Rs. 24,056 crore.
According to Motilal Oswal, "Metro Brands' ability to run an efficient retail network, as witnessed by the superlative productivity of Rs. 25,000/sq. ft. and store-level EBITDA margin of 25%, has translated into healthy net cash balance sheet and superlative RoIC. It has scored well on growth with consistent double-digit revenue/PAT growth over the last 10 years. Being one-third the size of BATA, there is a huge opportunity for the company to expand its store count. Recent brand tie-ups with third-party products could provide further growth opportunity. We have factored in revenue/PAT CAGR of 31%/37% over FY22-25E fueled by healthy store additions and strong recovery in SSSG. Key downside risks to our call are rising input cost and GST, modest store additions, and competition from foreign brands."
Campus - stock performances
The current market price of the company is Rs. 587/ share, and Prabhudas Lilladher has estimated a target price for the stock at Rs. 640/share, and given hold rating. In the last 6 months it has given 54.92% returns, in the last 1 month it has given 15.87% returns, and in the last 5 years it has given 76.49% returns. Its 52-week high market price is Rs. 602, and 52-week low market price is Rs. 297.10. This mid cap stock's market capitalisation is Rs. 17,879 crore.
"Campus with its vertically integrated manufacturing ecosystem and superior product quality has created an edge over the Indian sportswear market, which is dominated by the foreign brands. Its effective cost management, quick time to market and premiumization push are benefiting from the tectonic shift towards the sportswear category within the footwear market. Campus' tenable earnings growth, strong returns profile and self-sustainable growth model warrants rich valuation. We factor in supernormal revenue/PAT CAGR of 29%/42% over FY22-25E, respectively. Key downside risks to our call are weak industry demand in tier 2-3 cities, rising input cost, and execution risk in new regions," Motilal Oswal mentioned.
Return comparison from stocks - NSE
In this table the Current Market Price (CMP) and the Target Price (TP) of the recommended stocks have been mentioned.
|Metro Brands||Rs. 886.50||Rs. 1,000|
|Campus||Rs. 587||Rs. 640|
The above stocks were picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.