Liberty Shoes - A Multibagger in Making

thx buddy :slight_smile:


Interesting to heard about AI based model. I was wondering since how long/years do you follow this model ? What’s success/failure rate so far?

I would also recommend you to read “When Genius Failed” by Roger Loweinstein for what it’s worth.

Interesting to heard about AI based model. I was wondering since how long/years do you follow this model ? What’s success/failure rate so far?

I would also recommend you to read “When Genius Failed” by Roger Loweinstein for what it’s worth.

not so great results by the company … profit up by 84% appx.

Key thing to watch out in these kind of stories is Sales growth, especially Same Store, and in my opinion I would check immediately preceeding quarter (to get a better feel of change happening). That is not so good.

9 month volume growth of 44% and profit growth of 121% is quite good in my opinion.

Dissecting every quarter is not helpful in my opinion.

A stock price is reflection of sales growth and profit for next 10 years, and not the last quarter…!

I think results are very good. Lets not forget that these are standalone results and LRR results would be available in the consolidated entity from mar quarter. Last year LRR did around 60cr of sales…also, there would not be any brand license fee to be given by Liberty to LRR.

The results are excellent and unfortunately I do not pay heed to every stock idea that it throws, because of fund constraints, but its fun and profitable for sure.

Technically, the stock right now is at very important support levels. For somebody who believes in this story would be buying at the right level. Obviously, I am adding more from today (infact have already bought a few tick today).

Well, the support did not hold and it is into freefall zone now.

No, it did…infact it has not come to that level so far…110 is the level and the SL should be 100. I am definitely adding more. I guess you were talking about moving averages. Breakout levels are the biggest support. If it makes sense, then the savy investor Dolly Khanna has increased her stake in the company.

Looks promising technically for a short term trade. RSI is at over bought levels, CCI looks to be heading for -100 from below and %R is heading upwards.

The stock seems to be chugging along for now. I’m thinking the next trigger would be

a) whenever LRR results come out

b) IF that number significantly contributes to this year’s ambitious target of 500 crores. They made a statement that made the market to sit back & take notice. Unfortunately they are kind of on a sticky wicket with the sales figures falling short of expectations.

The perfect icing on the cake will be whenever valuation gap with Bata narrows down but that is ofcourse in the long run over the next couple of quarters. However the acid test will be if they can meet this year’s target.

The problem with this one is … even if they are improving the bottom-line i do not expect them go far ahead. Soon they will have to start paying tax which is not the case now. This will restrict the PAT growth YOY even though sales keeps improving.

Lack of Dividend distribution and Tax payments are the factors that will keep a check on its price barring short-term upswings …

HDFC Sec has come out with a report on Liberty with a Target price of 156.

Some of the highlights from the report

1)The management stated that the amount of royalty / franchisee fees paid to the group companies as a % to sales would reduce further in Q4FY14 and in FY15 as the entities have agreed to a cap on these fees.

2)As regards the restructuring of some or all of the group companies (Liberty Enterprise, Liberty Group Marketing Division & Liberty Footwear Company), the company indicated that the same is likely to be completed by March 31, 2015

3)LRR will merge LSL from Q4FY14 as it expects to receive final orders by end of March

  1. The company expects the working capital cycle to improve going forward. The inventory days are expected to reduce from 94 days in FY13 to 80 days in FY14, whilethe receivable days are likely to come down from 100 days in FY13 to 85 days in FY14.

link to a article I found online.

It is slightly dated but will help throw some light on the management.

Some interesting points )-- Overall inventories are down by about 50 percent. )-- There now are 101 distributors, about 8,000 multi-brand retailers, 85 exclusive showrooms, and 254 Liberty-branded retailers. )-- The strike rate of new itemsâthe frequency of sales per sales opportunitiesâhas increased from 15 percent to more than 60 percent. )-- Inventory liquidation sales are needed much less frequently. )-- More new retailers and distributors are coming to Liberty Shoesâabout two new stores have opened each week in the past year. )-- Sales at exclusive showrooms and Liberty-branded retail outlets are up about 30 percent. )-- Overall sales are up about 20 percent. )-- Finally, the daily, automatic replenishment of items prevents immeasurable lost sales It seems implementation of TOC is helping Liberty.

The falling rubber prices should also greatly benefit liberty in the coming quarters,if not in this quarters. Technically doing all the right things too.

Dolly Khanna’s investment has increased from 1.64% to 1.83% as per latest shareholding data. She has purchased 33606 shares last quarter

Management walks the talk. Delivers 500cr topline. Good results, profitability increasing.