Recent Price Movement and Market Context
The footwear company’s stock has been trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. This decline contrasts with the broader market’s mixed performance, where the Sensex opened 235.57 points higher but reversed sharply to close down by 558.02 points at 83,411.80, a 0.39% decrease. The Sensex remains 3.29% shy of its 52-week high of 86,159.02, with its 50-day moving average still positioned above the 200-day moving average, indicating a longer-term positive trend for the benchmark index.
Long-Term Performance and Valuation Metrics
Over the past year, Khadim India Ltd has delivered a negative return of 49.63%, significantly lagging behind the Sensex’s 9.84% gain. The stock’s 52-week high was Rs.332, highlighting the extent of the recent decline. Despite this, the company’s valuation metrics present a contrasting picture. With a Return on Capital Employed (ROCE) of 7.5% and an enterprise value to capital employed ratio of 1.3, the stock is trading at a discount relative to its peers’ historical valuations. This valuation reflects the market’s cautious stance given the company’s recent financial performance.
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Financial Performance and Profitability Concerns
The company’s financial results have reflected a challenging environment. Net sales have declined at a compound annual growth rate (CAGR) of -6.01% over the last five years, with a sharp 21.77% drop reported in the December 2025 quarter. This downturn has contributed to three consecutive quarters of negative results. The latest six-month period saw the company’s profit after tax (PAT) contract by 59.14%, amounting to Rs.3.31 crores.
Profitability ratios further underline the pressures faced by Khadim India Ltd. The average return on equity (ROE) stands at 6.90%, indicating modest returns generated on shareholders’ funds. The company’s ability to service debt is constrained, with a high debt to EBITDA ratio of 4.37 times and an operating profit to interest coverage ratio of just 1.71 times in the latest quarter. Additionally, the debtors turnover ratio for the half-year is at a low 2.02 times, suggesting slower collection cycles.
Comparative Performance and Market Position
In addition to underperforming the Sensex, Khadim India Ltd has lagged behind the broader BSE500 index over the last three years, one year, and three months. This consistent underperformance reflects both sectoral pressures and company-specific factors. The footwear sector itself has seen mixed trends, but Khadim’s relative weakness is notable given its market capitalisation grade of 4 and a Mojo Score of 15.0, which currently translates to a Strong Sell rating. This rating was downgraded from Sell on 11 August 2025, reflecting deteriorating fundamentals and market sentiment.
Shareholding and Corporate Structure
The company remains majority-owned by promoters, maintaining a stable shareholding pattern despite the stock’s recent volatility. This ownership structure may influence strategic decisions and capital allocation going forward.
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Summary of Key Metrics
Khadim India Ltd’s current market capitalisation grade of 4 indicates a mid-sized company with moderate liquidity. The stock’s recent day change was a decline of 2.50%, continuing the trend of underperformance. The company’s Mojo Grade of Strong Sell reflects the combination of weak sales growth, profitability pressures, and elevated leverage. Despite a valuation that appears attractive on certain metrics such as ROCE and enterprise value to capital employed, the fundamental challenges have weighed heavily on the stock price.
Conclusion
The stock’s fall to Rs.143.85, its lowest level in 52 weeks, underscores the difficulties faced by Khadim India Ltd in maintaining growth and profitability amid a competitive footwear sector. The sustained decline over eight trading sessions and the underperformance relative to both sector and benchmark indices highlight the cautious stance adopted by the market. While valuation metrics suggest some discount relative to peers, the company’s recent financial results and leverage ratios continue to present headwinds.
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