Khadim India Faces Financial Struggles Amid Declining Sales and Investor Confidence

Khadim India, a microcap player in the footwear industry, has recently undergone an adjustment in its evaluation score. This revision reflects underlying trends that merit attention. The company has experienced a notable decline in its financial performance, with a reported -7.65% CAGR growth in net sales over the past five years. Additionally, the company's ability to service its debt is concerning, as indicated by a high Debt to EBITDA ratio of 17.33 times.
In terms of profitability, Khadim India has generated an average Return on Equity (ROE) of 4.30%, suggesting limited efficiency in utilizing shareholders' funds. The latest quarterly results show a significant drop in profit before tax, which fell by -41.81% to Rs 7.60 crore. Furthermore, the debtors' turnover ratio stands at a low 2.35 times, indicating challenges in managing receivables.

Institutional investor participation has also waned, with a decrease of -0.54% in their stake over the previous quarter, now collectively holding 5.79% of the company. This trend, coupled with the stock's performance—yielding -30.32% returns over the past year—highlights the challenges Khadim India faces in both the near and long term.

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