"Despite the slowdown we see a huge movement of customers flocking to Liberty Shoes because of the change in the merchandise assortment. We are going to add almost 30 lakh new customers this year," CEO Adesh Gupta told CNBC-TV18.
Liberty Shoes stocks closed at Rs 112.30, up Rs 0.75, or 0.67 percent, on the BSE on Friday. It has touched an intraday high of Rs 114.45. The company's market capitalisation stands at Rs 191.36 crore.
Below is the edited transcript of Adesh Gupta interview on CNBC-TV18
Q: The market was getting excited yesterday, the stock was up 13 percent or so. Is there any kind of corporate move which is being planned in terms of restructuring or anything like that?
A: The market is based on fundamentals because Liberty has outperformed its competitors. As a result, the topline growth has been unprecedented in our last two quarters. There was a huge movement in the stock yesterday. I am sure this trend will continue because the company is going to outperform in the footwear companies this year.
Q: Coming to the fundamentals, in the previous quarter you saw a surge of 49 percent on your total income and your EBTIDA too improved in terms of margins to 8.2 percent versus 7.8 percent. Can you just tell us how this quarter is panning out and what is the sales growth trajectory that we can expect?
A: We hope that by the end of this financial year we would be able to cross Rs 500 crore mark for the first time ever. Despite the slowdown in the economy we see a huge movement of customers flocking to Liberty Shoes because of the change in the merchandise assortment. There's focus on certain product lines and I could say that we are going to add almost 30 lakh new customers this year. If you look at yesterday's Brand Equity ET report, our brand has been ranked number two, up from number five. So, it is a confidence which has come in the minds of the buyers, including the investor and shareholders.
Q: Give us some numbers then, you had a very strong second quarter. The income was up 50 percent, profit or EBITDA was up 60 percent, you had a jump in net profit. For the full financial year what kind of numbers are you targeting?
A: As I said earlier, we are targeting a growth of almost about 30-40 percent in the financial year. We should touch topline of nearly Rs 500 crore for the first time ever. We hope to maintain our EBITDA margins as well. We also see a surge in profit in the closing year.
Q: Do you have any capex plan considering the strong growth rate that you are working with?
A: The company has an adequate capacity for the next two to three years. We are able to amortise the growth through the capex we have already done about couple of years back. We don't see any major capex coming up in the next two or three years. However, there will be small upgrades in small machineries, which happens every year. But we don't see any major impact on the capex side.
Q: What does you balance sheet look like in terms of cash flow generation as well as debt on books?
A: We do not have any long-term debt in the company per se. We do have only the short-term, which I would say basically is the supply chain requirement in terms of the capital which is almost about a Rs 100 crore in the books.
Liberty Shoes stock price
On December 20, 2013, Liberty Shoes closed at Rs 112.30, up Rs 0.75, or 0.67 percent. The 52-week high of the share was Rs 115.90 and the 52-week low was Rs 67.80.
The company's trailing 12-month (TTM) EPS was at Rs 6.21 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 18.08. The latest book value of the company is Rs 91.80 per share. At current value, the price-to-book value of the company is 1.22.
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