Liberty Shoes Reports Strong Profit Growth Amid Long-Term Growth Challenges

Liberty Shoes, a microcap player in the consumer durables sector, has recently undergone an adjustment in evaluation, reflecting a nuanced view of its market position and performance indicators. The company has reported positive financial outcomes for the third quarter of FY24-25, with a notable growth in profit after tax (PAT) of 50.41%, amounting to Rs 4.46 crore. This performance is underscored by a return on capital employed (ROCE) of 10.8, suggesting an attractive valuation relative to its enterprise value.
Over the past year, Liberty Shoes has generated a return of 29.56%, significantly outpacing the broader market, which recorded a return of 7.49%. However, the company has faced challenges in long-term growth, with net sales and operating profit increasing at annual rates of 1.98% and 7.36%, respectively, over the last five years.

The technical landscape indicates a mildly bearish trend, with key indicators such as the KST reflecting bearish signals since April 21, 2025. Despite its performance metrics, domestic mutual funds hold no stake in Liberty Shoes, which may suggest a cautious outlook on the stock's valuation or business fundamentals.

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