Liberty Shoes Ltd Falls to 52-Week Low of Rs.238 Amid Continued Underperformance

Stock Price Movement and Market Context

On the trading day, Liberty Shoes Ltd’s shares touched an intraday low of Rs.238, representing a decline of 2.84% from the previous close. This drop outpaced the footwear sector’s performance, underperforming by 2.13%. The stock is currently trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.

In contrast, the broader market index, Sensex, experienced a negative session, falling by 463.56 points or 0.65% to close at 83,030.93. Despite this, Sensex remains within 3.77% of its 52-week high of 86,159.02, highlighting a divergence between the benchmark’s relative strength and Liberty Shoes’ weakening position. The Sensex has also recorded a 3.18% decline over the past three weeks, trading below its 50-day moving average, though the 50DMA remains above the 200DMA, indicating mixed medium-term market signals.

Financial Performance and Profitability Trends

Liberty Shoes Ltd has reported a notable decline in profitability metrics over recent quarters. The Profit Before Tax (PBT) for the quarter ending September 2025 stood at Rs.3.00 crore, reflecting a 43.0% decrease compared to the average of the previous four quarters. Similarly, the Profit After Tax (PAT) for the same period was Rs.1.96 crore, down by 42.1% relative to the prior four-quarter average.

Interest expenses have increased significantly, with a 25.97% rise over the nine-month period, reaching Rs.11.69 crore. This escalation in interest costs has exerted additional pressure on the company’s bottom line, contributing to the subdued earnings performance.

Over the past year, Liberty Shoes Ltd’s profits have contracted by 14.4%, a factor that has coincided with the stock’s steep decline of 49.57% during the same timeframe. This contrasts sharply with the Sensex’s positive 8.37% return over the last year, underscoring the stock’s relative underperformance.

Long-Term and Sectoral Comparison

Examining the company’s performance over a longer horizon reveals persistent challenges. Liberty Shoes Ltd has underperformed the BSE500 index across multiple periods, including the last three years, one year, and three months. This sustained lag behind broader market indices and sector peers highlights ongoing difficulties in regaining momentum.

The stock’s 52-week high was Rs.481.25, indicating that the current price level of Rs.238 represents a decline of over 50% from its peak within the last year. This substantial drop reflects a combination of factors impacting investor sentiment and valuation.

Valuation and Capital Efficiency

Despite the recent price weakness, Liberty Shoes Ltd maintains a Return on Capital Employed (ROCE) of 8.8%, which is considered moderate within the footwear sector. The company’s enterprise value to capital employed ratio stands at 1.5, suggesting a valuation that is attractive relative to its capital base.

Compared to its peers, Liberty Shoes Ltd is trading at a discount to historical average valuations, which may reflect market caution given the recent earnings contraction and elevated interest costs. The majority shareholding remains with promoters, indicating stable ownership structure amid the stock’s price volatility.

Mojo Score and Analyst Ratings

Liberty Shoes Ltd currently holds a Mojo Score of 31.0, which corresponds to a Sell grade. This represents an improvement from a previous Strong Sell rating assigned on 11 Nov 2025. The Market Capitalisation Grade is rated 4, reflecting the company’s mid-tier market cap status within its sector.

The downgrade in rating earlier in November 2025 was influenced by the company’s declining profitability and rising interest expenses, factors that continue to weigh on the stock’s performance. The current Sell rating indicates cautious sentiment among analysts, consistent with the stock’s recent price trajectory.

Summary of Key Metrics

To summarise, Liberty Shoes Ltd’s stock has reached a 52-week low of Rs.238, down 2.84% on the day and underperforming its sector by 2.13%. The stock’s one-year return stands at -49.57%, contrasting with the Sensex’s positive 8.37% gain. Profitability has declined, with PBT and PAT falling by over 40% in the latest quarter compared to prior averages, while interest costs have increased by nearly 26% over nine months.

Valuation metrics suggest the stock is trading at a discount relative to peers, supported by a ROCE of 8.8% and an enterprise value to capital employed ratio of 1.5. The promoter group remains the majority shareholder, maintaining control amid the stock’s downward movement.

Market Environment

The broader market backdrop has been mixed, with the Sensex experiencing a three-week consecutive decline of 3.18%, though still near its 52-week high. Liberty Shoes Ltd’s underperformance relative to both the sector and benchmark indices highlights the specific pressures facing the company within the footwear industry.

Conclusion

Liberty Shoes Ltd’s fall to a 52-week low of Rs.238 reflects a combination of subdued earnings, rising interest expenses, and sustained underperformance relative to market benchmarks. The stock’s valuation metrics indicate a discount compared to peers, while the company’s financial indicators point to ongoing challenges in profitability and growth. The current market environment and analyst ratings further contextualise the stock’s position within the footwear sector and broader equity markets.

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