Khadim India Limited announced its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, and conducted an investor presentation on February 16, 2026. The footwear retailer faced challenging market conditions, reporting declining revenues and posting a net loss for the third quarter.

Financial Performance Overview

The company's financial performance showed mixed results across different periods:

Quarterly Results Analysis

For Q3FY26, Khadim India reported revenue from operations of ₹862.37 million, marking a significant 21.8% decline from ₹1,102.35 million in the corresponding quarter of the previous year. Total income for the quarter stood at ₹900.22 million compared to ₹1,145.52 million in Q3FY25. The company's total expenses for Q3FY26 were ₹883.89 million, down from ₹1,075.93 million in Q3FY25. Despite the reduction in expenses, the company posted a net loss of ₹1.74 million for the quarter, contrasting sharply with the profit of ₹11.68 million recorded in Q3FY25.

Nine-Month Performance

For the nine months ended December 31, 2025, revenue from operations declined to ₹2,835.40 million from ₹3,242.29 million in the corresponding period of FY25, representing a 12.5% decrease. However, the company managed to maintain profitability for the nine-month period with a net profit of ₹23.66 million, though this was 43.5% lower than the ₹41.85 million profit recorded in the same period last year.

Impact of New Labour Codes

A significant factor affecting the quarterly results was the implementation of new labour codes. The company recognized exceptional items worth ₹18.20 million in Q3FY26 related to the "Impact of new Labour Codes." This exceptional charge primarily arose from changes in wage definition, affecting gratuity and leave encashment benefits. The Government of India notified four Labour Codes on November 21, 2025, consolidating 29 existing labour laws.

Investor Presentation and Corporate Developments

The Board of Directors, in their meeting held on February 10, 2026, approved several key decisions and scheduled an investor presentation for February 16, 2026:

Business Highlights and Strategy

During the investor presentation, the company showcased its extensive retail network of 864 'Khadim's' branded retail stores as of December 2025, with presence across 28 states and 4 union territories. The company operates an asset-light model with 76% of retail presence through franchise route and outsources 100% of product requirement. Khadim India positions itself as the second largest footwear retailer in India with the largest presence in East India and among the top 3 players in South India.

The company's retail business targets middle and upper middle-income consumers across metros, Tier I-III cities with products priced between ₹123 to ₹6,499. The business model focuses on distinct brand positioning across various market segments, catering to approximately 85% of the total Indian footwear market potential through its retail and distribution business.

Source: Company Presentation

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.