Current Rating and Its Significance
MarketsMOJO currently assigns Liberty Shoes Ltd a 'Sell' rating, reflecting a cautious stance on the stock. This rating suggests that investors should consider reducing their exposure or avoiding new purchases at present, given the company's prevailing challenges. The rating was revised on 11 Nov 2025, moving from a 'Strong Sell' to a 'Sell', indicating a slight improvement in the company’s outlook but still signalling significant risks.
How the Stock Looks Today: An Overview of Key Parameters
As of 26 January 2026, Liberty Shoes Ltd’s financial and market data reveal a complex picture. The company operates within the footwear sector and is classified as a microcap, which often entails higher volatility and risk. The current Mojo Score stands at 31.0, categorised under the 'Sell' grade, reflecting a modest improvement from the previous score of 28.
Quality Assessment
The quality grade for Liberty Shoes Ltd is rated as average. This indicates that while the company maintains some operational stability, it lacks the robust fundamentals typically associated with higher-quality stocks. Investors should note that average quality often translates to moderate business risks and limited competitive advantages in the footwear sector.
Valuation Perspective
One of the more positive aspects of Liberty Shoes Ltd’s current profile is its valuation, which is considered very attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings, assets, or cash flow. For value-oriented investors, this could represent a potential opportunity, although it must be weighed against other risk factors.
Financial Trend Analysis
The financial grade is negative, signalling deteriorating financial health. The latest quarterly results show a significant decline in profitability, with Profit Before Tax (PBT) excluding other income falling by 43.0% to ₹3.00 crores compared to the previous four-quarter average. Similarly, Profit After Tax (PAT) dropped by 42.1% to ₹1.96 crores. Additionally, interest expenses have increased by 25.97% over the past nine months, reaching ₹11.69 crores, which adds pressure on the company’s earnings and cash flows.
Technical Outlook
The technical grade remains bearish, reflecting negative momentum in the stock price. Recent price movements confirm this trend, with the stock declining by 1.63% on the latest trading day. Over longer periods, the stock has underperformed significantly, delivering a 48.19% loss over the past year and showing steep declines of 29.42% over three months and 38.59% over six months. This bearish technical backdrop suggests limited near-term upside and heightened downside risk.
Stock Returns and Market Performance
As of 26 January 2026, Liberty Shoes Ltd has delivered disappointing returns across multiple time frames. The one-day return was -1.63%, while the one-week and one-month returns were -6.10% and -17.84%, respectively. The stock’s year-to-date performance stands at -17.37%, and over the past year, it has declined by 48.19%. This underperformance extends beyond the short term, with the stock lagging the BSE500 index over the last three years, one year, and three months, highlighting persistent challenges in generating shareholder value.
Implications for Investors
The 'Sell' rating on Liberty Shoes Ltd reflects a combination of average operational quality, very attractive valuation, negative financial trends, and bearish technical signals. For investors, this means that while the stock may appear cheap on valuation metrics, the underlying financial weakness and poor price momentum warrant caution. The rating advises a conservative approach, suggesting that investors either reduce their holdings or avoid initiating new positions until there is clear evidence of financial recovery and technical improvement.
Sector and Market Context
Operating in the footwear sector, Liberty Shoes Ltd faces competitive pressures and market dynamics that have contributed to its current challenges. The microcap status adds an additional layer of risk due to lower liquidity and higher volatility. Investors should consider these factors alongside the company’s fundamentals when making portfolio decisions.
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Conclusion
In summary, Liberty Shoes Ltd’s current 'Sell' rating by MarketsMOJO is grounded in a thorough analysis of its quality, valuation, financial trends, and technical outlook as of 26 January 2026. While the valuation appears attractive, the company’s negative financial trajectory and bearish price action suggest that investors should exercise caution. Monitoring future quarterly results and technical signals will be crucial for reassessing the stock’s potential.
Investor Takeaway
Investors should view the 'Sell' rating as a signal to prioritise capital preservation and risk management. Given the stock’s recent performance and financial challenges, it may be prudent to limit exposure until there are clear signs of operational turnaround and improved market sentiment.
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