Khadim India Limited — Investor Meet, 16-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

Financial Performance: Khadim India Limited reported a revenue of ₹160.6 crores for the quarter, representing a 2.2% increase year-on-year. The net profit after tax was ₹2.4 crores, soaring by 31.7% compared to the previous year. Margins showed improvement, with a gross margin of 48.3%, up 360 basis points, and an EBITDA of ₹19.3 crores, translating to a 12% margin, marking a 9.4% growth year-on-year. However, on a half-year basis, revenue slightly declined by 0.2% to ₹314.5 crores, with net profit falling 12.3% to ₹3 crores.

Future Outlook and Growth Drivers: Management expressed optimism about medium-term growth in the organized footwear market, driven by urbanization and a shift to organized retail. New partnerships, including with Underlinen Fashion House for Puma products, and the rollout of a new athleisure line, are expected to enhance brand presence and contribute to future sales.

Order Book and Operational Updates: During H1 FY '25, Khadim added 42 stores, bringing the total to 891. Distribution contributed 32.7% of revenue, bolstered by an increase in the number of distributors to 764, covering 27 states and 5 union territories.

Analyst Q&A Insights: Analysts queried about revenue growth in distribution, the impact of retail performance, and the expected profitability from the Puma partnership. Management highlighted a 24% revenue surge in the distribution segment, crediting demand for new PU products. Retail sales are forecasted to stabilize during the forthcoming wedding and winter seasons, despite recent challenges.

Market or Regulatory Updates: The discussion included the upcoming demerger of the distribution business, expected to streamline operations and enhance accountability within the segments.

Strategic Focus Areas: A shift towards lowering MRPs to boost volumes, along with a strong focus on new product launches and expansion into athleisure, showcases management's proactive approach to navigate current market challenges.

Investor Insight: The company demonstrates solid financial health amidst market pressures, with a balanced growth strategy that may indicate a favorable position for potential long-term investments.