Khadim India Limited , a leading footwear retailer, has reported its financial results for the second quarter, showing a mixed performance with revenue challenges but improved margins. The company also shared insights on its strategic initiatives and market outlook during its recent earnings call.

Financial Highlights

For Q2, Khadim India reported:

The company's revenue showed a decline compared to the previous year, reflecting ongoing challenges in consumer demand, particularly in the mid-price segment.

GST Implementation and Pricing Strategy

Khadim India successfully implemented the recent GST reduction across its 893-store network. The company expects margin improvements following the GST reduction to 5% for footwear priced under ₹2,500. This move is anticipated to enhance price competitiveness and potentially stimulate demand in the coming quarters.

Rittick Roy Burman, Managing Director of Khadim India, stated, "With the GST cut and our own product innovation from ₹500 to ₹1,500, which is ongoing right now, I think we would be pretty much competitive. And we would be providing a lot of value to consumers, and they should buy from us."

Product Segmentation and Brand Performance

The company reported varying performance across different price segments:

1. Below ₹500: Experiencing double-digit growth following price adjustments
2. ₹500 to ₹1,500: Facing challenges, but expected to improve with GST reduction
3. Premium Segment: Brands like British Walker and Sharon showing double-digit growth

British Walker, in particular, has expanded its premium offerings, now ranging from ₹2,000 to ₹7,000, with new launches in the ₹3,000 to ₹7,000 bracket seeing positive traction.

E-commerce and Retail Expansion

The company reported that e-commerce contribution improved from 1.3% in Q1 to around 4% in Q2. Khadim India has partnered with a specialized e-commerce agency to enhance its online operations and drive growth in this channel.

In terms of retail expansion, the company is focusing more on franchisee-operated stores (TFM and FRM models) and plans to open more Exclusive Brand Outlets (EBOs). The management is also taking strict decisions to close non-performing company-owned stores to improve overall profitability.

Inventory Management and Working Capital

Khadim India is actively working on reducing inventory levels and optimizing working capital. The company has already reduced inventory compared to March levels and aims to further reduce it.

Indrajit Chaudhuri, Group CFO, mentioned, "We are very much taking care in our outsourcing thing so that then there is no overbuy. And also, we are taking care of this inventory, so that the right inventory is there in the right place, but there is no overburden of inventory."

Distribution Subsidiary Listing

The company's distribution subsidiary, KSR Footwear Limited, is set to list on stock exchanges in the coming week. The distribution business has reported a turnover of around ₹100 crores in the first half, with expectations of profitability in the next financial year.

Outlook

While facing challenges in the mid-price segment, Khadim India remains optimistic about growth prospects in both the budget and premium categories. The company expects the recent GST reduction and ongoing product innovations to drive volume growth and improve margins in the coming quarters.

The management anticipates that the upcoming wedding season and winter months will contribute positively to sales. However, they maintain a cautious stance given the recent mixed demand trends across markets.

As Khadim India continues to navigate the evolving market dynamics, its focus on product innovation, brand building, and retail network optimization is expected to play a crucial role in its future performance.

Khadim India Limited , a prominent footwear company, has announced its financial results for the second quarter and first half of the fiscal year 2026, following a significant corporate restructuring. The company recently completed the demerger of its Distribution Business, marking a new chapter in its operational strategy.

Key Highlights

• Khadim India Limited unveiled its unaudited standalone and consolidated financial results for Q2 and H1 FY26.
• The company successfully demerged its Distribution Business to KSR Footwear Limited (KFL).
• The demerger became effective from May 1, 2025, with an appointed date of April 1, 2025.
• KFL allotted 1,83,78,382 new equity shares to Khadim's shareholders on June 7, 2025.
• Khadim's ₹80.10 million investment in KFL was canceled as part of the demerger process.
• KFL ceased to be a wholly-owned subsidiary of Khadim India Limited from April 1, 2025.

Demerger Details

The demerger of the Distribution Business represents a strategic move by Khadim India Limited to streamline its operations. As part of this corporate action:

Financial Reporting

In light of the demerger, Khadim India Limited has made adjustments to its financial reporting:

• The demerged distribution business results are now disclosed as discontinued operations in the financial statements.
• This change in reporting structure aims to provide a clearer picture of the company's continuing operations.

Corporate Governance

The Board of Directors of Khadim India Limited convened on November 7, 2025, to approve the financial results. This timely approval and subsequent disclosure demonstrate the company's commitment to transparent corporate governance practices.

Investor Communication

In compliance with regulatory requirements, Khadim India Limited has published newspaper advertisements on November 8, 2025, in 'Business Standard' (all editions) in English and in 'Aajkal' in Bengali. These advertisements detail the unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2025.

The company's proactive approach to investor communication is evident in its prompt filing with stock exchanges and widespread publication of results, ensuring that all stakeholders have access to the latest financial information.

As Khadim India Limited navigates this post-demerger landscape, investors and market watchers will be keen to observe how this strategic move impacts the company's performance and market position in the coming quarters.