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Shares of foodwear manufacturing companies were in demand on Thursday with Khadim India (Rs 229.85) and Liberty Shoes (Rs 267) being locked in the 20 per cent upper circuit on the BSE, as of 02:21 PM. The move came on the back of heavy volumes in an otherwise subdued market.
Superhouse surged 18 per cent to Rs 277.30, while Mirza International soared 10 per cent to Rs 54.91 on the BSE. Bata India, Metro Brands, Sreeleathers, Relaxo Footwears and Campus Activewear were up in the range of 2-7 per cent. In comparison, the S&P BSE Sensex was trading flat at 59,560.
Most of these stocks had underperformed the market and corrected sharply from their respective 52-week highs after reporting a weak operational performance due to rising raw material prices.
According to a Business Standard report, contract manufacturers are increasing their presence in India with suppliers to global non-leather footwear players like Nike, Adidas, Puma and Reebok now flocking India as part of the China-plus-one strategy.
On Monday, the world's largest manufacturer Taiwan-based Pouchen signed a deal with Tamil Nadu govt to come up with a Rs 2,302-crore unit, at least six other global majors were in the process of setting up their units in the state.
According to industry sources, global non-leather majors like Feng Tay, Hong Fu, Dean Shoes, Oasis Footwear, Sports Gear and Zucca are either in the process of setting up their units in Tamil Nadu or have already started works on this. Globally, more than 85 per cent of the footwear sold is non-leather. CLICK HERE FOR FULL REPORT
That said, among the individual stocks, Liberty Shoes has rallied 44 per cent in the past 13 trading days from a level of Rs 185 on March 28, 2023. It had hit a 52-week high of Rs 444.80 on October 14, 2022.
"With the government's focus on the manufacturing sector, the future potential of the footwear industry is promising, particularly for established and organized brands. The Production Linked Incentive (PLI) scheme to be announced from Government for footwear sector also will open up new avenues of enlarging manufacturing base in India to compete with China. The on-going changes in lifestyle and purchase habits have influenced the footwear industry as well," the company had said while announcing its Q3FY23 results in February.
Rising discretionary income, improvement in living standards, increased brand consciousness, growing work force has resulted in the shift from the unorganized sector to the organized sector market to India, the company said.
