LIBERTY SHOES - UPDATE

LIBERTY SHOES  recommended @ Rs.112 on 21/12/2013 ( Link HERE ) .Stock currently trading @ Rs.155 ,an appreciation of about 50 % in 6 trading sessions .Even if it appreciated substantially in short period of time , I believe there is still room for further appreciation in this stock.Companies  backed by good brands will  always command higher P/E multiples and as per available information ,Liberty is doing well in business in recent times .Requesting to still HOLD this stock in your portfolio for long term.


Disc: I have vested interest in LSL

LIBERTY SHOES LTD - WEAR THIS SHOES

 

  

Liberty Shoes Ltd is the second largest shoe manufacturer in India – next to Bata – with a production capacity of 50000 pair shoes per day from 6 units.Its facilities located at Karnal (Haryana) Paonta Sahib (HP)  and  Roorkee ( Uttarakhand)  .  Company having wide marketing network consists of 150 distributors, 400 exclusive showrooms and over 6000 multi-brand outlets. Liberty also exporting its products to more than 25 countries across the world.Its main brands are Force 10,Mark Free,Fortune,Coolers,Senorita,Windsor,Freedom, Footfun..etc. After few years of slow growth now company is again showing signs of revival.On a sequential basis Liberty increased its sales substantially in last four quarters.It improved from Rs.72 Cr to Rs.97 Cr during this period. In the latest March quarter company posted a profit of Rs.1.8 Cr . Here an important point to note is that , there was an extraordinary one time expense of Rs.3.23 Cr provided in this quarter.If we exclude this amount  ,NP will be more than 500 % compared with last year same quarter and more than 100% from December quarter.Now company is planning ambitious growth ahead.It is decided to merge its retail subsidiary LibertyRetail Revolution with Itself .For the next 3 years company having plans for expansion worth Rs. 500 Cr .Methods for fund raising not announced so far but indicated the chance of P/E funding route.For the last one month, its share price move from Rs.90 level to Rs.125 /- But after shifting the stock to ‘T’ group , it now corrected sharply and trading around Rs.95/-. Medium to long term investors may consider an entry at this level.