Key Events This Week
16 Feb: Sharp quarterly profit decline reported
16 Feb: Downgrade to Strong Sell by MarketsMOJO
17 Feb: Continued price weakness amid bearish technical signals
20 Feb: Week closes at Rs.248.50 (-6.24%)
16 February 2026: Quarterly Results Reveal Steep Profit Decline
Liberty Shoes Ltd reported a significant deterioration in its quarterly financial performance for the period ended December 2025. The company posted a profit after tax (PAT) of just ₹0.62 crore, representing a steep 81.5% decline compared to its previous four-quarter average. Operating profit before depreciation, interest and taxes (PBDIT) fell to ₹13.24 crore, with the operating profit to net sales ratio contracting to 7.32%, the lowest in recent quarters.
This sharp decline in profitability was accompanied by operational challenges, including a reduced operating profit to interest coverage ratio of 3.47 times and a rising debt-equity ratio of 0.73 times at the half-year mark. The debtors turnover ratio also slowed to 5.78 times, indicating potential working capital pressures. Earnings per share (EPS) dropped to ₹0.35, marking the weakest quarterly figure in recent history.
On the trading front, the stock closed at Rs.265.40, a modest gain of 0.13% on the day, but this masked intraday volatility as the share price fluctuated between Rs.260.10 and Rs.277.85. Despite the slight positive close, the underlying financial results raised concerns about the company’s near-term earnings trajectory.
16 February 2026: MarketsMOJO Downgrades Liberty Shoes to Strong Sell
Following the disappointing quarterly results, MarketsMOJO downgraded Liberty Shoes Ltd from a Sell to a Strong Sell rating on 16 February 2026. This downgrade reflected a marked deterioration in the company’s financial and technical indicators. The financial trend score worsened from -15 to -21 over the past three months, signalling increased risk and faltering profitability.
Despite an attractive valuation with a return on capital employed (ROCE) of 8.8% and an enterprise value to capital employed ratio of 1.6, the downgrade was driven by weak earnings, subdued sales growth, and rising leverage. The company’s net sales growth of 7.63% annualised over five years was below sector expectations, and it reported negative quarterly results for three consecutive quarters.
Technical indicators also painted a bearish picture. The stock’s technical trend shifted from mildly bearish to bearish, with daily moving averages firmly negative and oscillators such as the Know Sure Thing (KST) confirming bearish momentum on weekly and monthly timeframes. The Relative Strength Index (RSI) showed no clear signal, while Bollinger Bands indicated bearishness weekly and mild bearishness monthly.
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17 February 2026: Price Decline Continues Amid Mixed Market Conditions
The stock price declined sharply by 1.83% to Rs.260.55 on 17 February 2026, reflecting investor caution following the downgrade and weak quarterly results. Trading volume decreased to 1,937 shares, indicating subdued market interest. Meanwhile, the Sensex continued its upward trajectory, gaining 0.32% to close at 36,904.38, highlighting Liberty Shoes’ underperformance relative to the broader market.
18 February 2026: Further Price Erosion on Low Volumes
On 18 February, Liberty Shoes’ share price slipped another 0.38% to Rs.259.55 on very low volume of 432 shares. The stock’s decline contrasted with the Sensex’s 0.43% gain to 37,062.35, underscoring the stock’s persistent weakness amid positive market sentiment. The muted trading activity suggested limited buying interest as investors awaited clearer signals on the company’s recovery prospects.
19 February 2026: Sharp Drop Amid Sensex Correction
The stock suffered its steepest single-day fall of the week on 19 February, dropping 3.24% to Rs.251.15. This decline coincided with a broader market correction, as the Sensex fell 1.45% to 36,523.88. Trading volume rose to 1,656 shares, reflecting increased selling pressure. The sharp price drop further emphasised the negative sentiment surrounding Liberty Shoes amid ongoing financial and operational concerns.
20 February 2026: Week Ends with Continued Weakness Despite Sensex Recovery
Liberty Shoes closed the week at Rs.248.50 on 20 February 2026, down 1.06% on the day with a notable volume spike to 6,300 shares. This final decline brought the weekly loss to 6.24%, significantly underperforming the Sensex’s 0.39% gain over the same period. The stock’s persistent weakness despite the broader market’s recovery highlights the challenges the company faces in regaining investor confidence.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | Rs.265.40 | +0.13% | 36,787.89 | +0.70% |
| 2026-02-17 | Rs.260.55 | -1.83% | 36,904.38 | +0.32% |
| 2026-02-18 | Rs.259.55 | -0.38% | 37,062.35 | +0.43% |
| 2026-02-19 | Rs.251.15 | -3.24% | 36,523.88 | -1.45% |
| 2026-02-20 | Rs.248.50 | -1.06% | 36,674.32 | +0.41% |
Key Takeaways
The week’s developments for Liberty Shoes Ltd underscore a challenging operating environment and deteriorating financial health. The sharp 81.5% quarterly PAT decline and compressed operating margins highlight significant profitability pressures. Rising leverage and slower debtor turnover ratios point to potential liquidity constraints and operational inefficiencies.
The downgrade to a Strong Sell rating by MarketsMOJO reflects these fundamental weaknesses, compounded by bearish technical indicators signalling continued downward momentum. The stock’s 6.24% weekly decline, in stark contrast to the Sensex’s 0.39% gain, emphasises its underperformance and heightened risk profile.
Despite an attractive valuation on certain metrics such as ROCE and enterprise value to capital employed, the company’s subdued sales growth and persistent negative earnings trend overshadow these positives. Investors should note the increased volatility and cautious market sentiment as Liberty Shoes navigates these headwinds.
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Conclusion
Liberty Shoes Ltd’s performance this week reflects a company grappling with significant financial and operational challenges. The steep quarterly profit decline and subsequent downgrade to Strong Sell have weighed heavily on the stock, resulting in a 6.24% weekly loss that contrasts sharply with the broader market’s modest gains.
While valuation metrics suggest some underlying value, the persistent negative earnings trend, rising leverage, and bearish technical signals indicate that the stock faces considerable headwinds. Investors should exercise heightened caution and closely monitor forthcoming quarterly results and management commentary to assess any potential turnaround in the company’s fortunes.
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