Khadim India Reports Q1 Revenue Decline and Profit Slump Amid Retail Challenges
Khadim India Limited, India's second-largest footwear retailer, faced challenges in Q1 with revenue decreasing 8.1% to ₹957.00 million and profit after tax dropping 81.7% to ₹8.60 million year-over-year. Gross margin fell from 54.5% to 47.7%, while EBITDA margin decreased from 16.8% to 12.9%. The company maintains 884 retail stores across India, with 76% being franchise stores. Khadim has partnered with Skechers to sell their products in select stores and completed a demerger of its distribution and manufacturing segments.
*this image is generated using AI for illustrative purposes only.
Khadim India Limited , India's second-largest footwear retailer, has released its financial results for the first quarter, revealing a challenging period for the company. The footwear giant, known for its extensive presence in East India, faced headwinds in both revenue and profitability.
Revenue and Profit Performance
Khadim India reported a revenue of ₹957.00 million in Q1, marking an 8.1% decrease from ₹1,041.00 million in the corresponding quarter of the previous year. The company's profit after tax (PAT) saw a substantial decline of 81.7%, dropping to ₹8.60 million from ₹47.10 million year-over-year.
Margin Pressure
The company experienced significant margin pressure during the quarter:
| Metric | Q1 Current | Q1 Previous | Change |
|---|---|---|---|
| Gross Margin | 47.7% | 54.5% | -6.8% |
| EBITDA Margin | 12.9% | 16.8% | -3.9% |
The contraction in margins was attributed to promotional discounts offered during the quarter, which impacted the company's profitability.
Retail Network and Strategic Moves
Despite the financial challenges, Khadim India maintains a strong retail presence:
- 884 'Khadim's' branded retail stores across 24 states and 4 union territories
- 207 company-owned and company-operated (COCO) stores
- 677 franchise stores, representing 76% of the retail network
The company has recently completed the demerger of its distribution and manufacturing segments into KSR Footwear Limited, a move aimed at streamlining operations.
Strategic Partnership
In a notable development, Khadim India has entered into a strategic partnership with Skechers. This collaboration will allow select Khadim stores to sell Skechers products, potentially broadening the company's product offerings and customer base.
Market Position and Future Outlook
Khadim India continues to maintain its position as the second-largest footwear retailer in India, with the largest presence in East India. The company is also recognized as one of the top three players in South India and boasts the largest footwear retail franchise network in the country.
While the Q1 results indicate a challenging period, Khadim India's extensive retail network and strategic initiatives, such as the Skechers partnership and the recent demerger, may provide avenues for future growth and recovery. The company's focus on an asset-light model, with 76% of its retail presence through franchises and 90% outsourcing of product requirements, could help in managing costs and improving profitability in the coming quarters.
As the footwear market in India continues to evolve, Khadim India's ability to navigate these challenges while leveraging its strong brand presence and extensive reach will be crucial for its performance.
Historical Stock Returns for Khadim
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.57% | -1.62% | -15.68% | -13.80% | -33.29% | +92.02% |
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