Bata, Relaxo, Metro, Campus - Putting The Best Foot Forward: Motilal Oswal Initiates Coverage
Bata, Relaxo, Metro, Campus - Putting The Best FOOT Forward: Motilal Oswal Initiates Coverage
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Motilal Oswal Report
The Rs 960 billion Indian footwear market (FY20) is witnessing a unique transformation over the last few years. India’s young populace with high aspiration and having an improved fashion quotient is driving demand, especially for casual, athleisure, sneakers and women’s footwear, et al.
Over one-third of the market is composed of high-average selling price products, primarily catered by organised/branded players, where investment in exclusive brand outlet is the key. The resulting heavy investment and execution challenge create an entry barrier, as is evident from a handful of large footwear brands in the industry.
In contrast, the lower-average selling price product category offers high opportunity in both open and closed footwear organised segments, led by customer shift towards organised market. However, it needs product/distribution strength to command competitive advantage.
In our footwear coverage universe, we like:
Campus Activewear Ltd. as it has created the right inhouse capability to tap the large-scale opportunity in mass sports footwear market.
Metro Brands Ltd. due to its ability to run an efficient footwear ‘retail’ network that can drive scale.
Bata India Ltd.’s recent brand/product refreshment and store addition targets are steps in the right direction, but they are yet to reflect meaningfully on customer reception and improved earnings growth.
Relaxo Footwears Ltd. is a dominant player in the open footwear segment, but it has lately faced intense competition from the unorganised players.
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