Liberty Shoes tumbled 4.14% to Rs 307 at 10:18 IST on BSE after net profit rose 0.91% to Rs 3.32 crore on 9.69% decline in total income from operations to Rs 101.98 crore in Q1 June 2014 over Q1 June 2013.
The Q1 result was announced after market hours on Wednesday, 23 July 2014.
Meanwhile, the S&P BSE Sensex was down 9.03 points or 0.03% at 26,138.30.
On BSE, so far 74,000 shares were traded in the counter as against average daily volume of 1.97 lakh shares in the past two weeks.
The stock hit a high of Rs 310 and a low of Rs 299.05 so far during the day.
Sh. Adesh Gupta, CEO & ED of Liberty Shoes said that the company, despite market sentiments not being favourable during this quarter, has been able to register growth in its branded footwear being sold through its showrooms & distributors which has been Rs 94.83 crore as against Rs 93.94 crore during corresponding quarter. The overall domestic sales of the company have been down because of deferment of one of the major prestigious institutional orders worth Rs 48 crore approximately which the company has bagged at the end of quarter, part of which were to be supplied in this quarter like corresponding previous years quarter, Gupta said.
The company in its institutional segment, due to deferment of this institutional supply, has seen decline in this quarter which has affected the sales targets of the company during this quarter, Gupta said. This supply will be made in the next quarter. The company is expecting to achieve its sales target of six months. Gupta further stated that institutional business is important for the company as a marketing strategy to enhance its brand visibility through educational institutions, PSU & institutions and big corporates.
The company has seen tremendous growth in its export which has increased substantially by 66% as against the corresponding previous year's quarter. The improvement on the export front is mainly due to tie ups with new customers and renewal of the existing contracts on better terms.
Despite small dip in overall sales of the company, the company has seen improvement in operating margin due to benefits accruing through merger and also due to reduced raw material cost. The company has low margin in some of its institutional supplies, deferment of which in the next quarter has led in the overall improvement in the margin as a whole due to sales mix having moderate margin. The company is hopeful to better it further, going forward, keeping in view the various corrective initiatives taken by the company.
With regard to the company's growth outlook, Gupta said that Q1 June 2014 was weak quarter in terms of growth because of overall market sentiment. However, the company feels that the demand should pick up going forward and the focus area of the company is to achieve growth through enhancing same store sales and opening of new high street stores in various upcoming cities across India, Gupta said.
Liberty Shoes' board of directors at its meeting held on Wednesday, 23 July 2014, observed the company's plan to restructure its operations by consolidating the business available from group concerns under franchise arrangements is under active consideration. The company has bagged major institutional order worth approximately Rs 48 crore and the supplies will now be made in the second quarter, although part of which were earlier planned in the first quarter which affected the sales targets. Further, the company has added 21 new exclusive stores in company owned and company operated (COCO) and franchise format and plans to add 20 more new exclusive stores in second quarter also. The company in this quarter has witnessed growth of over 14% in its own stores, Liberty Shoes said.
Liberty Shoes is one of the leading footwear manufacturers in India.
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