Lehar Footwears Declines 1.09% Amid Downgrade and Valuation Shifts

Monday, 16 February 2026: Weak Start Amid Broader Market Gains

Lehar Footwears opened the week at Rs.227.25, marking a 2.47% decline from the previous Friday’s close of Rs.233.00. This drop came despite the Sensex rising 0.70% to 36,787.89, signalling stock-specific pressures. The volume was robust at 94,470 shares, indicating active selling interest. The decline reflected mounting concerns over the company’s recent financial performance and valuation outlook, which were soon to be formally addressed by analysts.

Tuesday, 17 February 2026: Downgrade to Sell and Valuation Reassessment

On 17 February, Lehar Footwears was downgraded from a Hold to a Sell rating by MarketsMOJO, citing mixed financial and valuation signals. The downgrade followed a detailed review of the company’s quarterly results, which showed a sharp 60.9% drop in PAT to ₹2.13 crores and a decline in net sales to ₹57.13 crores, the lowest in recent quarters. Despite a strong half-yearly growth trend, the latest quarter’s volatility raised caution.

The valuation grade shifted from Very Attractive to Attractive, reflecting a recalibration of market expectations. The stock traded at a price-to-earnings ratio of 18.31, a moderate level compared to peers such as Bhartiya International (P/E 32.14) and Super Tannery (P/E 10.45). The downgrade and valuation shift contributed to a modest 0.48% gain in stock price to Rs.228.35 on low volume of 16,291 shares, as investors digested the news amid a Sensex gain of 0.32%.

Wednesday, 18 February 2026: Gradual Recovery on Moderate Volume

The stock continued to recover, closing at Rs.229.65, up 0.57% on a volume of 32,276 shares. This modest gain came alongside a 0.43% rise in the Sensex to 37,062.35. The market appeared to stabilise after the downgrade, with investors cautiously optimistic about the company’s long-term growth prospects despite short-term earnings volatility. The valuation attractiveness, particularly the low PEG ratio of 0.09, may have supported this measured rebound.

Thursday, 19 February 2026: Outperformance Despite Market Weakness

Lehar Footwears bucked the broader market trend by gaining 1.20% to close at Rs.232.40, its weekly high, on strong volume of 65,264 shares. This rally occurred even as the Sensex fell sharply by 1.45% to 36,523.88, reflecting sector-specific or stock-specific buying interest. The intraday strength suggested some investor confidence in the company’s operational efficiency, highlighted by a return on capital employed of 19.91% and return on equity of 17.25%. However, the stock remained below its 52-week high of Rs.322.20, indicating room for recovery.

Friday, 20 February 2026: Profit Taking and Weekly Close

The week ended with a 0.84% decline to Rs.230.45 on volume of 24,287 shares, as the Sensex rebounded 0.41% to 36,674.32. The stock’s weekly performance was a net gain of 1.43% from Monday’s open, yet it underperformed the Sensex by 1.48% over the week. The mixed price action reflected ongoing investor caution amid the recent downgrade and valuation shifts. The company’s modest dividend yield of 0.22% and recent quarterly earnings volatility continued to weigh on sentiment.

Key Takeaways from the Week

Mixed Financial Signals: The downgrade to Sell was driven by a sharp quarterly PAT decline of 60.9% to ₹2.13 crores and the lowest recent net sales of ₹57.13 crores, despite strong half-yearly growth of 89.01% in net sales and 173.04% in PAT. This volatility highlights operational challenges amid a competitive footwear sector.

Valuation Recalibration: The shift from Very Attractive to Attractive valuation grade reflects a more balanced risk-reward profile. Trading at a P/E of 18.31 and EV/EBITDA of 11.11, Lehar Footwears remains reasonably priced relative to peers, supported by a low PEG ratio of 0.09 and solid returns on capital employed (19.91%) and equity (17.25%).

Technical Underperformance: The stock declined 1.09% over the week, underperforming the Sensex’s 0.39% gain. The 12-month price return of -7.67% contrasts with the Sensex’s 9.66% rise, signalling recent investor caution. The stock’s current price near Rs.230 remains well below its 52-week high of Rs.322.20.

Sector and Market Context: Footwear sector headwinds, including raw material cost fluctuations and competitive pressures, continue to influence sentiment. Lehar’s mid-sized market capitalisation and modest dividend yield of 0.22% add to the cautious outlook despite operational strengths.

Conclusion: A Week Marked by Caution and Valuation Adjustments

Lehar Footwears Ltd’s week was characterised by a significant downgrade to Sell and a recalibration of valuation metrics, reflecting mixed financial results and evolving market sentiment. While the company’s long-term growth remains impressive, recent quarterly earnings volatility and underperformance relative to the Sensex have tempered enthusiasm.

The stock’s reasonable valuation multiples and strong returns on capital provide some support, yet the downgrade signals caution for investors. The footwear sector’s challenges and the company’s mid-sized status contribute to ongoing uncertainty. Overall, the week’s developments suggest that Lehar Footwears is navigating a complex environment where operational stability and market confidence will be critical for future price momentum.

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