Recent Price Movement and Market Context
The stock has been on a downward trajectory for the last three consecutive trading sessions, registering a cumulative loss of 6.33% during this period. Despite outperforming its sector by 0.54% on the day it hit the new low, Khadim India remains substantially below its key moving averages, trading beneath the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This technical positioning underscores the prevailing bearish sentiment surrounding the stock.
In contrast, the broader market, represented by the Sensex, opened flat but has since edged lower by 0.14%, trading at 84,925.36 points. The Sensex remains close to its 52-week high of 86,159.02, just 1.45% shy, and continues to trade above its 50-day moving average, which itself is positioned above the 200-day moving average, signalling a generally bullish market environment. This divergence highlights Khadim India’s relative underperformance within a generally positive market backdrop.
Long-Term Performance and Valuation Metrics
Over the past year, Khadim India has delivered a negative return of 57.75%, starkly contrasting with the Sensex’s positive 7.90% gain over the same period. The stock’s 52-week high was Rs.390.55, indicating a substantial decline of over 60% from that peak. This underperformance extends beyond the last year, with the stock also lagging behind the BSE500 index over the last three years, one year, and three months.
From a valuation perspective, the company exhibits a very attractive Enterprise Value to Capital Employed ratio of 1.3, and a Return on Capital Employed (ROCE) of 7.5%. These figures suggest that the stock is trading at a discount relative to its peers’ historical valuations. However, this valuation advantage has not translated into positive returns or improved profitability in recent times.
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Financial Performance and Profitability Concerns
Khadim India’s financial results for the latest six-month period reveal a contraction in key metrics. Net sales declined by 25.46% to Rs.197.30 crores, while profit after tax (PAT) fell sharply by 62.21% to Rs.2.52 crores. The company’s Return on Capital Employed (ROCE) for the half year stood at a low 3.38%, indicating limited efficiency in generating returns from its capital base.
Over the last five years, the company’s net sales have exhibited a negative compound annual growth rate (CAGR) of -4.87%, reflecting a persistent decline in top-line growth. Additionally, the average Return on Equity (ROE) has been modest at 6.90%, signalling relatively low profitability per unit of shareholders’ funds.
Debt and Institutional Holding Trends
Khadim India’s financial leverage remains a point of concern, with a high Debt to EBITDA ratio of 4.37 times. This level of indebtedness suggests a constrained ability to service debt obligations comfortably. Institutional investors have responded to these fundamentals by reducing their stake by 1.96% in the previous quarter, now collectively holding just 3.22% of the company’s shares. Given their analytical resources, this decline in institutional participation may reflect cautious sentiment towards the stock’s prospects.
Comparative Sector and Market Positioning
Within the footwear sector, Khadim India’s performance has been below par both in the long term and near term. The stock’s significant depreciation contrasts with the broader market’s resilience and the sector’s relative stability. Despite the attractive valuation metrics, the company’s earnings have contracted by 14.7% over the past year, further highlighting the challenges faced in reversing the downtrend.
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Mojo Score and Market Capitalisation Assessment
Khadim India currently holds a Mojo Score of 17.0, categorised as a Strong Sell. This rating was upgraded from Sell on 11 August 2025, reflecting a deterioration in the company’s overall quality and outlook. The market capitalisation grade stands at 4, indicating a relatively small market cap within its peer group. These assessments align with the stock’s recent price behaviour and fundamental challenges.
Despite the stock’s recent underperformance, it remains a notable constituent within the footwear sector, which continues to attract attention for its consumer-driven dynamics. However, Khadim India’s current valuation and financial indicators suggest a cautious stance among market participants.
Summary of Key Metrics
To summarise, Khadim India Ltd’s stock has reached a new 52-week low of Rs.152.9, following a three-day losing streak and a 6.33% decline over that period. The company’s financials reveal declining sales and profits, low returns on equity and capital employed, and a high debt burden. Institutional investors have reduced their holdings, and the stock’s Mojo Grade has been downgraded to Strong Sell. While the valuation appears attractive relative to peers, the stock’s performance and fundamentals have remained subdued over the past year and beyond.
These factors collectively illustrate the challenges faced by Khadim India Ltd in regaining momentum within a competitive footwear sector and a generally buoyant market environment.
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