Liberty Shoes (LIBERTSHOE)

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Sales growth of 13% shows top-line demand is still alive.
• Promoter holding of 58.46% aligns management with minority shareholders.
• Book value of ₹126.69 provides some tangible support at ₹265.28.
• Debt/Equity of 0.73 is moderate and not an immediate solvency red flag.
• ROCE of 9.99% is better than ROE, suggesting some operating efficiency remains.

Concerns

• Profit growth down -72.69% and latest quarter net profit only ₹1 Cr on ₹181 Cr sales reflects razor-thin profitability.
• ROE of 5.36% is far too low for the valuation and for the risk of a footwear business.
• P/E of 35.22 and PEG of 2.71 are expensive given collapsing earnings; no dividend yield offers compensation.
• Piotroski F-Score of 4/9 points to deteriorating financial health and no visible moat in the numbers.

AI Analysis

Let me examine Liberty Shoes the way I would any business. The 13% sales growth is the one bright spot; revenue is moving forward. But my enthusiasm stops there. Net profit has fallen almost 73%, and the latest quarter generated just ₹1 crore on ₹181 crore of sales. That is a razor-thin margin, not evidence of pricing power. With a P/E of 35.22 on these depressed earnings, I am being asked to pay a high price for a business whose profit is collapsing. Graham would say price is what you pay, value is what you get; here I see little value. Return on equity of 5.36% is far below what a shareholder deserves, and ROCE of 9.99% barely compensates for the 0.73 debt-to-equity ratio. The Piotroski F-Score of 4 out of 9 indicates financial weakness, not improvement. Promoter holding of 58.46% is reassuring, but ownership alone does not create a moat. Book value of ₹126.69 gives some support, yet at ₹265.28 I am paying over two times book for a company earning just over 5% on equity. There is no dividend to wait for while the story plays out. The 52-week range of ₹210.50 to ₹404.95 shows how speculative the stock has been. I need to see margins recover, leverage fall, and the 13% sales growth turn into meaningful bottom-line profit. Until then, this is a potential turnaround, not a proven compounding machine. The figures don't justify optimism; they demand proof.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer