Footwear Stocks in India: Revenue Growth and Profitability Trends

When was the last time you thought about footwear stocks? Probably never. We usually focus on what’s on our feet rather than who’s making a profit from it. But guess what? The footwear industry in India is going through some interesting twists and turns, knowing which can help you make sound decisions.

A Slow Walk in Q3 2024-25

The performance of footwear stocks in India during the October-December quarter of 2024-25 was rather slow. The combined revenue growth of the top four listed footwear firms was just 2.9% year-on-year (Y-o-Y) . To simply put, out of all the consumer discretionary stocks, footwear shares were the slowest movers.

Why the slowdown? A mix of factors. Consumer spending was cautious, demand was lukewarm, and inflation didn’t exactly help. People were more focused on necessities than splurging on an extra pair of sneakers. Even big brands found it tough to make their mark in this quarter.

Union Budget 2025: Could Provide Spring in the Steps

The recently tabled Union Budget 2025 could provide a spring in the steps of the footwear industry and its shares. The honourable finance minister announced a ‘Focus Product Scheme’ to boost the sector’s productivity, quality, and competitiveness.

This scheme is about improving manufacturing capabilities with better machinery, high-quality design capacity, and stronger component production. And the best part? It covers both leather and non-leather footwear. So, whether you're into classic leather formals or trendy sneakers, the industry is gearing up to make them better and more affordable.

Profitability Trends and What it Means for Investors?

This scheme is about improving manufacturing capabilities with better machinery, high-quality design capacity, and stronger component production. And the best part? It covers both leather and non-leather footwear.

So, whether you're into classic leather formals or trendy sneakers, the industry is gearing up to make them better and more affordable. That said, here’s how profitability trends are likely to look for the industry in the coming days with the announcement of the new scheme.

• Lower Production Costs – With better manufacturing facilities and machinery, companies can produce footwear more efficiently. This means lower costs per unit and higher margins for manufacturers.

• Higher Export Potential – With increased support for exports, Indian footwear brands can tap into international markets more aggressively, leading to higher revenue streams beyond domestic sales.

• Increased Consumer Demand – As the sector gets a boost, companies can invest more in branding, marketing, and product innovation, making their products more appealing to consumers. More sales can result in more profits for players operating in the industry.

Wrapping it up

While footwear stocks in India had a rough patch in Q3, the future looks promising. With government support, rising consumer demand, and an industry-wide push for better products, footwear shares could be on track for a solid recovery. However, like any investment, it’s crucial to keep an eye on financials, brand performance, and how companies leverage these new opportunities for growth.