Liberty Shoes Ltd is Rated Sell by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO currently assigns Liberty Shoes Ltd a 'Sell' rating, indicating a cautious stance towards the stock. This rating suggests that investors should consider reducing exposure or avoiding new purchases at present, based on a comprehensive evaluation of the company’s quality, valuation, financial trends, and technical indicators. The rating was last updated on 11 Nov 2025, when the company’s Mojo Score improved slightly from 28 to 31, moving the grade from 'Strong Sell' to 'Sell'. Despite this modest improvement, the overall outlook remains negative, reflecting ongoing challenges faced by the company.

Here’s How Liberty Shoes Ltd Looks Today

As of 24 December 2025, Liberty Shoes Ltd remains a microcap player in the footwear sector, with a Mojo Score of 31. The company’s stock performance has been underwhelming, delivering a year-to-date return of -41.33% and a one-year return of -41.08%. These figures highlight significant underperformance relative to broader market indices such as the BSE500, which the stock has lagged over the past three years, one year, and three months.

Quality Assessment

The quality grade for Liberty Shoes Ltd is assessed as average. This reflects a middling position in terms of operational efficiency, management effectiveness, and product competitiveness. While the company maintains a presence in the footwear sector, recent quarterly results have shown signs of strain. For instance, profit before tax (excluding other income) for the latest quarter stood at ₹3.00 crore, representing a 43.0% decline compared to the previous four-quarter average. Such results indicate challenges in sustaining profitability and operational momentum.

Valuation Perspective

From a valuation standpoint, Liberty Shoes Ltd is considered very attractive. The stock’s depressed price levels, driven by weak returns and negative sentiment, have brought valuations down to levels that may appeal to value-oriented investors. However, attractive valuation alone does not offset the risks posed by deteriorating fundamentals and negative financial trends. Investors should weigh the low price against the company’s ongoing challenges before considering entry.

Financial Trend Analysis

The financial grade for Liberty Shoes Ltd is negative, reflecting deteriorating earnings and rising costs. The latest six-month profit after tax (PAT) stands at ₹5.26 crore, down by 22.88%, signalling contraction in net profitability. Additionally, interest expenses have increased by 25.97% over the past nine months, reaching ₹11.69 crore, which adds pressure on the company’s bottom line. These trends suggest that Liberty Shoes is facing headwinds in managing its financial health, with profitability under strain and leverage costs rising.

Technical Outlook

Technically, the stock is graded as bearish. The price trend over recent months has been predominantly downward, with a three-month decline of 18.35% and a six-month drop of 31.33%. Despite a modest one-day gain of 0.79% and a one-week rise of 4.40%, the overall momentum remains weak. This bearish technical stance indicates that the stock is likely to face resistance in the near term, and investors should be cautious about potential further declines.

Implications for Investors

The 'Sell' rating on Liberty Shoes Ltd reflects a combination of average operational quality, very attractive valuation due to depressed prices, negative financial trends, and bearish technical signals. For investors, this rating suggests that the risks currently outweigh the potential rewards. While the valuation may tempt value investors, the ongoing decline in profitability and negative price momentum warrant prudence. Investors holding the stock should consider their risk tolerance and investment horizon carefully, while prospective buyers may prefer to wait for signs of financial recovery and technical stabilisation before entering.

Summary

In summary, Liberty Shoes Ltd’s current 'Sell' rating by MarketsMOJO, last updated on 11 Nov 2025, is grounded in a thorough analysis of the company’s present-day fundamentals and market position as of 24 December 2025. The stock’s average quality, very attractive valuation, negative financial trends, and bearish technical outlook collectively inform this cautious recommendation. Investors should approach the stock with care, recognising the risks inherent in its recent performance and financial health.

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