LIBERTY SHOES - REPEAT

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 This stock once recommended @ Rs.95 .( Old report HERE) .Recommending it again @ CMP of Rs.112 due to company's recent initiatives and improving financial performance.When I recommended this stock last time it was in 'T' group but now it excluded from 'T' group and trading normally.I expect Liberty Shoes  will be a stock to watch out in 2014 and will turn out  as an  out performer from the mid/small cap space in the coming year.

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In last few years ,even in India ,we have seen few fantastic turnarounds from the verge of collapse to great success.Eicher Motors and Bata India are best examples for  such a  rise as phoenix from the ashes.From a low of Rs.63 reported in 2003 ,share price of Eicher Motors galloped to Rs.5000 in just 10 years.In case of Bata India ,  stock moved from Rs.26 to Rs.1085 during this same period.If we dig deep ,there is some common factors in many of such companies which turned around dramatically .’ Brand ‘  is one important factor in many such cases. Strategic marketing and technical collaborations , sincere efforts of management with hard work and dedication are the other key points present in such cases.Considering many of such factors , Liberty Shoes is currently at a situation where Bata was 5 or 6  years ago.Incidentally both these companies are in the same line of business too.Liberty is one among the largest 5 producers of leather shoes in the world with a production capacity of 50000 pairs per day.Company selling its products through a  marketing network comprising of 150 distributors, 400 exclusive showrooms and more than 6000 multi brand stores. In addition to this ,company having strong presence in all major  online stores.Liberty’s major brands includes Force-10 ,Fortune,Gliders,Coolers,Senorita,TipTop..etc.

                                                                                            What is interesting at this point is – Promoters are again looking the business seriously and taking every efforts to bring the company into the right track.Company decided to appoint external agencies for in- depth study of the existing operations of the Company .Recently company introduce a host of new attractive models and expanding presence into new geographies.In an effort to increase margins company planning to rationalise its sourcing of raw materials. Presence of some private companies under the same management may be a reason for conflict of Interest .Recently management hinted their plan to consolidate the business under the listed entity in an efforts for value creation.Recently they decided to merge  retail arm Liberty Retail Revolution  with the company which is planning to add 100 new stores every year .At present RRL running more than 400 show rooms .It seems all the efforts of management started to show positive results.In the latest September quarter ,company reported a 50 % growth in sales and sharp increase in net profits from just Rs 8 lakhs to  Rs.3 Cr .

                                                               Entry of some well known private investors like Dolly Khanna (who spotted multibaggers like Hawkinks,Cera Sanitary,Amara Raja Battery,Relaxo Foot ware ..etc at attractive price levels) in Libery Shoes is another point to note along with the positive changes happening in the company.Dolly Khanna entered in the more than 1 % share holder’s list in latest September quarter.I believe -with a very good brand ,large marketing and manufacturing facilities and changing attitude of promoters with aggressive growth plans – this branded play will turn as a wealth creator in the years to come.Stock listed in BSE and NSE.Reiterating  strong BUY @ CMP Rs.112

Link to Company's recently renovated website HERE

Link to latest Interview with MD. HERE

Disc: I  have vested interest in LSL